SEC Filing | First Advantage Corporation

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Registration Statement on Form S-4

As filed with the Securities and Exchange Commission on June 30, 2003

Registration No. 333-[ ]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

FIRST ADVANTAGE CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware		7375		61-1437565
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

805 Executive Center Drive West

Suite 300

St. Petersburg, Florida 33702

(727) 290-1000

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Kenneth D. DeGiorgio, Esq.

Executive Vice President, General Counsel and Assistant Secretary

First Advantage Corporation

1 First American Way

Santa Ana, California 92707-5913

(714) 800-3000

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

With a copy to:

Neil W. Rust, Esq.

White & Case LLP

633 West Fifth Street

Los Angeles, California 90071

(213) 620-7700

Approximate date of commencement of proposed sale to the public:

From time to time after this registration statement becomes effective.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨__________

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨ __________

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered(1)	Proposed Maximum Offering Price Per Share(2)		Proposed Maximum Aggregate Offering Price(2)		Amount of Registration Fee(3)

Class A common stock, $.001 par value	4,000,000 shares	$	16.75	$	67,000,000	$	5,421

(1)

Pursuant to Rule 416 under the Securities Act, this Registration Statement includes any additional shares of First Advantage’s Class A common stock that may become issuable as a result of any stock split, stock dividend, recapitalization or other similar transaction effected without the receipt of consideration that results in an increase in the number of First Advantage’s outstanding Class A common stock.

(2)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act, based on the average of the high and low sales prices of one share of First Advantage Class A common stock, as reported on the Nasdaq National Market on June 27, 2003.

(3)

Calculated in accordance with Section 6 of the Securities Act and Rule 457 under the Securities Act by multiplying 0.0000809 and the proposed maximum aggregate offering price.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a) may determine.

PROSPECTUS

LOGO

4,000,000 SHARES OF CLASS A COMMON STOCK

We are offering up to 4,000,000 shares of our Class A common stock, par value $.001 per share, for issuance from time to time as full or partial consideration for the acquisition of businesses, assets or securities of other business entities.

People who receive shares of our Class A common stock in connection with an acquisition may be permitted by us to use this prospectus and a prospectus supplement to resell their shares. You should read the section entitled “Selling Shareholders” to find out more information about resales, if any, including the amount of securities being resold.

The specific terms of each acquisition will be determined at or near the time of the acquisition by negotiations with the owners of the businesses, assets or securities to be acquired. Shares of our Class A common stock issued hereunder will be valued at approximately the market value at the time the terms of the acquisition are tentatively or finally agreed to, when the acquisition is completed, or during a specific period of time before we deliver the shares.

We may be required to provide further information by means of a post-effective amendment to the registration statement of which this prospectus forms a part or a prospectus supplement once we know the actual information concerning a specific acquisition. We urge you to read this prospectus and any accompanying prospectus supplement before you make your investment decision.

We do not expect to receive any cash proceeds from the sale of our Class A common stock pursuant to this prospectus, or to use an underwriter or pay underwriting discounts or commissions with respect to such shares.

Our Class A common stock is listed on the Nasdaq National Market under the trading symbol “FADV.” On June 27, 2003, the closing price of one share of our Class A common stock on the Nasdaq National Market was $16.75.

An investment in First Advantage Class A common stock involves a number of risks.

You should consider the risks specified in the “ RISK FACTORS” section of this prospectus

beginning on page 6 before making any investment decision.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in connection with this prospectus or determined that this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

This prospectus is dated [ ], 2003.

WHERE YOU CAN FIND MORE INFORMATION

First Advantage has filed a registration statement on Form S-4, of which this prospectus forms a part, to register with the Securities and Exchange Commission the shares of First Advantage Class A common stock to be issued hereunder. As allowed by SEC rules, this prospectus does not contain all the information you can find in the registration statement or the exhibits to the registration statement. First Advantage will file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy the registration statement and any reports, statements or other information that First Advantage files with the SEC at the SEC’s public reference rooms at Public Reference Room, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549.

Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. These SEC filings are also available to the public from commercial document retrieval services and at the world wide web site maintained by the SEC at www.sec.gov.

This information is also available to shareholders and prospective shareholders without charge upon written or oral request to:

First Advantage Corporation

Ken Chin

805 Executive Center Drive West

Suite 300

St. Petersburg, Florida 33702

(727) 290-1000

To obtain timely delivery, you must request the information at least five business days before the date on which you must make a decision on whether to invest in First Advantage.

First Advantage has not authorized anyone to give any information or make any representation about the shares of Class A common stock or our company that is different from, or in addition to, that contained in this prospectus. Therefore, if anyone does give you information of this sort, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this prospectus is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this prospectus does not extend to you. The information contained in this prospectus is accurate only as of the date of this document unless the information specifically indicates that another date applies.

(i)

TABLE OF CONTENTS

		Page

Prospectus Summary		1

Summary Historical Consolidated Financial Information of US SEARCH and Summary Historical Combined Financial Information of the FAST Division		3

Summary Unaudited Pro Forma Combined Financial Data		5

Comparative Historical and Pro Forma Combined Per Share Data		4

Risk Factors		6

Selling Shareholders		11

Documents Incorporated by Reference

Cautionary Statement Regarding Forward-Looking Statements		12

Information about First Advantage		14

Price Range of Common Stock and Dividends		25

Selected Historical Financial Information of US SEARCH		26

US SEARCH Management’s Discussion and Analysis of Financial Condition and Results of Operations		27

Selected Historical Financial Information of the FAST Division		33

FAST Division Management’s Discussion and Analysis of Financial Condition and Results of Operations		34

Unaudited Pro Forma Combined Financial Statements		41

Description of First Advantage Capital Stock		50

Experts		52

Legal Matters		52

Index to Financial Statements		F-1

(ii)

PROSPECTUS SUMMARY

Our Company

First Advantage is a newly created public company. On June 6, 2003, First Advantage’s Class A common stock commenced trading on the Nasdaq National Market under the symbol “FADV”.

Prior to June 5, 2003, First Advantage’s activities were essentially limited to its participation in the business combination transaction contemplated by the Agreement and Plan of Merger dated December 13, 2002 by and among The First American Corporation, US SEARCH.com Inc., First Advantage and Stockholm Seven Merger Corp.

On June 5, 2003, pursuant to the Merger Agreement, HireCheck, Inc., Employee Health Programs, Inc., SafeRent, Inc., Substance Abuse Management, Inc., American Driving Records, Inc. and First American Registry, Inc., each formerly a wholly-owned subsidiary of First American and collectively comprising the First American Screening Technology (FAST) division, and US SEARCH, a public company whose common shares were, until June 5, 2003, traded on the Nasdaq National Market under the symbol “SRCH”, became wholly-owned operating subsidiaries of First Advantage.

Pursuant to the Merger Agreement, on June 5, 2003, First American received First Advantage Class B common stock representing approximately 80% of the economic interest and 98% of the voting interest of First Advantage. The former shareholders of US SEARCH exchanged their outstanding shares of US SEARCH common stock for First Advantage Class A common stock representing, in the aggregate, approximately 20% of the economic interest and 2% of the voting interest in First Advantage.

Through its operating subsidiaries, First Advantage now provides risk management enterprise and consumer screening and risk mitigation services, including employee background screening, occupational health services, motor vehicle reports and tenant screening services. A more complete description of First Advantage’s business is found in the section entitled “INFORMATION ABOUT FIRST ADVANTAGE CORPORATION” beginning on page 14 of this prospectus.

The full name, address and telephone number of our company is:

First Advantage Corporation

805 Executive Center Drive West

Suite 300

St. Petersburg, Florida 33702

(727) 290-1000

About this Prospectus

This prospectus and each prospectus supplement (if any) is part of a registration statement on Form S-4 that we filed with the SEC using a “shelf” registration process. Under the shelf registration process, we may offer and sell, from time to time, in one or more offerings, up to a total of 4,000,000 shares of our Class A common stock for use in connection with acquisitions by us of other businesses, assets or securities of other business entities. The consideration offered by us in such acquisitions, in addition to any shares of Class A common stock offered by this prospectus, may include cash, certain assets and/or assumption by First Advantage of liabilities of the businesses, assets or securities being acquired.

The terms of acquisitions involving the issuance of the Class A common stock covered by this prospectus are expected to be determined by direct negotiations with the owners or controlling persons of the assets, businesses or securities to be acquired. Factors that First Advantage may consider in determining whether to acquire a business include, among other factors, the quality and reputation of the business to be acquired and its management, the strategic market position of the business to be acquired, its proprietary assets, its ability to generate revenues and earnings, its cash flow and growth potential, and the market value of its equity securities when pertinent. It is anticipated that shares of our Class A common stock issued in any such acquisition will be offered at approximately

the then current market value of the Class A common stock. The value will be determined either when the terms of the acquisition are tentatively or finally agreed to, when the acquisition is completed, or during a period of time before we deliver the shares.

We do not expect to pay underwriting discounts or commissions, although we may pay finders’ fees from time to time in connection with certain acquisitions. Any person receiving finders’ fees may be deemed to be an “underwriter” within the meaning of the Securities Act, and any profit on the resale of shares of Class A common stock purchased by them may be considered underwriting commissions or discounts under the Securities Act.

This prospectus provides you with a general description of the securities we may sell. If required, each time we sell securities under this prospectus, we will provide a prospectus supplement that will contain specific information about the terms of that offering. A prospectus supplement may also add, update or change information contained in this prospectus. You should read this prospectus and the applicable prospectus supplement or supplements.

We may also permit individuals or entities who have received or will receive shares of our Class A common stock in connection with the acquisitions described above, or their transferees or successors-in-interest, to use this prospectus to cover their resale of such shares. See “Selling Shareholders,” as it may be amended or supplemented from time to time, for a list of those individuals or entities that are authorized to use this prospectus to sell their shares of our Class A common stock.

In making your investment decision, you should rely only on the information contained in this prospectus and any prospectus supplement. We have not authorized anyone to provide you with any other information. If you receive any unauthorized information, you must not rely on it. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale of these securities is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on which it is released by First Advantage.

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF US SEARCH AND
SUMMARY HISTORICAL COMBINED FINANCIAL INFORMATION OF THE FAST DIVISION

Explanatory Note: The information below reflects time periods prior to the consummation of the mergers through which First Advantage acquired US SEARCH and the companies formerly comprising the FAST division of The First American Corporation. The mergers were completed on June 5, 2003. US SEARCH and each of the FAST division companies are now wholly-owned subsidiaries of First Advantage, notwithstanding references below that would suggest that the mergers are pending or that US SEARCH and the FAST division companies are not owned by First Advantage.

The table below presents summary financial information of the FAST division and US SEARCH for each of the years in the five-year period ended December 31, 2002 and the three months ended March 31, 2003 and 2002. This information has been derived from the selected financial data of the FAST division and US SEARCH included in this prospectus. This information is only a summary, and you should read it in conjunction with the audited and unaudited historical financial statements and related notes of the FAST division and US SEARCH attached to this prospectus.

US SEARCH

	Three Months Ended March 31,						Fiscal Year Ended December 31,
	2003			2002			2002			2001			2000			1999			1998
Statement of Operations:
Total revenue	$	8,079,000		$	6,663,000		$	30,341,000		$	18,399,000		$	22,363,000		$	19,541,000		$	9,245,000
Net loss		(1,811,000	)		(2,998,000	)		(24,076,000	)		(11,937,000	)		(29,362,000	)		(26,377,000	)		(6,788,000	)
Net loss attributable to common stockholders		(1,811,000	)		(2,998,000	)		(24,076,000	)		(24,915,000	)		(34,443,000	)		(26,377,000	)		(6,788,000	)
Basic and Diluted Net Loss Per Common Share:
Net loss per share attributable to common stockholders	$	(0.02	)	$	(0.11	)	$	(0.41	)	$	(1.38	)	$	(1.93	)	$	(1.94	)	$	(0.71	)
Balance Sheet:
Total assets	$	29,783,000		$	32,924,000		$	31,299,000		$	27,735,000		$	12,015,000		$	25,650,000		$	575,000
Long-term debt, net of current portion		1,105,000			1,854,000			1,417,000			1,810,000			42,000			37,000			343,000
Long-term debt		4,379,000			16,364,000			3,208,000			8,263,000			1,094,000			84,000			4,001,000
Stockholders’ equity (deficit)		17,740,000			9,475,000			19,524,000			10,355,000			(3,141,000	)		19,489,000			(7,749,000	)

FAST DIVISION

	Three Months Ended March 31,				Fiscal Year Ended December 31,
	2003		2002		2002		2001			2000		1999			1998
Income Statement Data:
Service revenues	$	31,540,656	$	22,647,238	$	100,924,598	$	49,167,057		$	38,582,074	$	30,372,638		$	23,196,975
Net income (loss)	$	395,820	$	778,091	$	2,702,311	$	(579,309	)	$	50,515	$	(336,312	)	$	1,952,477
Balance Sheet Data:
Total Assets	$	165,337,769	$	107,056,647	$	164,006,580	$	62,283,725		$	26,628,269	$	15,591,881		$	5,431,869
Long-term debt, net of current portion	$	521,141	$	1,031,765	$	650,906	$	1,158,713		$	2,260,899	$	1,410,425		$	355,406
Stockholders’ equity	$	146,952,574	$	94,099,375	$	145,902,096	$	53,075,105		$	18,491,766	$	12,390,154		$	4,372,076

COMPARATIVE HISTORICAL AND PRO FORMA COMBINED PER SHARE DATA

The following table presents the audited basic and diluted earnings per share and book value per share data for US SEARCH on a historical basis and the unaudited basic and diluted earnings per share and book value per share data for First Advantage on a pro forma basis. Historical earnings per share and book value per share data for the FAST division is not presented below because the FAST division is comprised of wholly-owned subsidiaries of First American, which makes per share data not meaningful. The unaudited pro forma combined financial data presented below are not necessarily indicative of the financial position had the transaction occurred on December 31, 2002 or March 31, 2003 or operating results that would have been achieved had the transaction been in effect as of the beginning of the periods presented, and such data should not be construed as representative of future financial position or operating results of First Advantage. Neither the FAST division nor US SEARCH declared any cash dividends for the periods presented below. The pro forma combined net loss, pro forma stockholders’ equity and the pro forma number of shares of common stock outstanding used in determining the amounts presented below have been derived from unaudited pro forma combined financial statements included in this prospectus. This information is only a summary and should be read in conjunction with the selected historical financial data of the FAST division and US SEARCH, the unaudited pro forma combined financial statements of First Advantage included in this prospectus, and the separate audited and unaudited historical financial statements of the FAST division and US SEARCH and related notes attached to this prospectus.

	Three Months Ended March 31, 2003			Year Ended December 31, 2002
Historical—US SEARCH(1)
Loss per share:
Basic	$	(.02	)	$	(0.41	)
Diluted		(.02	)		(0.41	)
Book value per share		.18			0.20
Pro forma equivalent—US SEARCH(2):
Loss per share:
Basic		(—	)		(0.05	)
Diluted		—			(0.05	)
Book value per share		.42			0.42
Pro forma for First Advantage(3):
Loss per share:
Basic		(.07	)		(1.24	)
Diluted		(.07	)		(1.24	)
Book value per share		10.50			10.46

(1)

The historical loss per share for US SEARCH is calculated by dividing, loss attributable to common stockholders of US SEARCH by the weighted-average number of shares of US SEARCH common stock outstanding for the period. The book value per share is calculated by dividing stockholders’ equity by the number of shares of US SEARCH common stock outstanding as of March 31, 2003 and December 31, 2002.

(2)

The pro forma equivalent loss per share for US SEARCH is calculated by multiplying the pro forma loss per share for First Advantage by the merger exchange ratio of 1 share of Class A common stock of First Advantage for every 25 shares of stock of US SEARCH common stock. The pro forma equivalent book value per share is calculated by multiplying the pro forma book value per share for First Advantage by the merger exchange ratio of 1 share of Class A common stock of First Advantage for every 25 shares of stock of US SEARCH.

(3)

The pro forma combined loss per share and book value per share of First Advantage is computed by dividing pro forma loss and stockholders’ equity of First Advantage by 19,805,195 and 19,803,743 shares of First Advantage common stock calculated on a pro forma basis as of March 31, 2003 and December 31, 2002, respectively.

SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

Explanatory Note: The information below reflects a time period prior to the consummation of the mergers through which First Advantage acquired US SEARCH and the companies formerly comprising the FAST division. The mergers were completed on June 5, 2003. US SEARCH and each of the FAST division companies are now wholly-owned subsidiaries of First Advantage, notwithstanding references below that would suggest that the mergers are pending or that US SEARCH and the FAST division companies are not yet owned by First Advantage.

The table below presents selected financial data from the unaudited pro forma combined financial statements of First Advantage included in this prospectus. The unaudited pro forma combined financial statements give effect to the proposed combination of the FAST division and US SEARCH as if the combination had been completed on January 1, 2002 for income statement purposes and on March 31, 2003 for balance sheet purposes. The unaudited pro forma combined financial data is based on the estimates and assumptions set forth in the notes to such statements, which are preliminary and have been made solely for the purposes of developing such pro forma information. First Advantage does not claim or represent that the following summary unaudited pro forma financial information is indicative of the results that would have been reported had the transactions actually occurred on the dates indicated above, nor is it indicative of future results. The unaudited pro forma combined financial data should be read in conjunction with the unaudited pro forma combined financial statements and related notes of First Advantage, as well as the audited and unaudited historical financial statements and related notes of the FAST division and US SEARCH attached to this prospectus.

	Three Months Ended March 31, 2003			Year Ended December 31, 2002
Statement of Operations:
Total revenue	$	39,619,656		$	155,227,860
Net loss	$	(1,406,425	)	$	(24,469,530	)
Loss per share	$	(.07	)	$	(1.24	)
Shares used in calculation of earnings per share(1)		19,805,195			19,803,743

	At March 31, 2003
Balance Sheet:
Total assets	$	238,938,329
Long-term debt, net of current portion	$	1,114,307
Working capital	$	4,925,174
Stockholder’s equity	$	207,900,509

(1)

RISK FACTORS

An investment in First Advantage Class A common stock involves a number of risks. In addition to the other information we include in this prospectus, you should consider the following risk factors in making an investment decision.

The integration of First Advantage’s subsidiaries will be difficult and may result in a failure to realize some of the anticipated potential benefits of the mergers.

The recently completed mergers pursuant to which we acquired our operating subsidiaries necessitate the integration of several businesses that previously operated independently. We cannot assure you that First Advantage will be able to integrate operations of these businesses or any other businesses subsequently acquired by First Advantage without encountering difficulties. Any difficulty in integrating the operations of the businesses successfully could have a material adverse effect on the business, financial condition, results of operations or liquidity of First Advantage, and could lead to a failure to realize the anticipated synergies of the combination. First Advantage’s management will be required to dedicate substantial time and effort to the integration of these businesses. During the integration process, these efforts could divert management’s focus and resources from other strategic opportunities and operational matters.

First Advantage is controlled by First American and as a result other stockholders have little or no influence over stockholders’ decisions.

As a result of the recently completed mergers, First American owns 100% of the First Advantage Class B common stock, which have ten votes per share compared to one vote per share of First Advantage Class A common stock. Consequently, First American has approximately 98% of the total voting power of First Advantage and, therefore, First American has the right to control the outcome of any matter submitted for the vote or consent of First Advantage’s stockholders, unless a separate class vote is required under Delaware law. First American has the voting power to control the election of the First Advantage board of directors and is able to cause the amendment of First Advantage’s certificate of incorporation or bylaws. First American also may be able to cause changes in the business without seeking the approval of any other party. These changes may not be beneficial to First Advantage or in the best interest of First Advantage’s other stockholders. For example, First American has the power to prevent, delay or cause a change in control and could take other actions that might be favorable to First American, but not necessarily to other stockholders. Similarly, subject to restrictions contained in the standstill agreement entered into as part of the merger transactions, First American has the voting power to exercise a controlling influence over First Advantage’s business and affairs and has the ability to make decisions concerning such things as:

•

mergers or other business combinations;

•

purchases or sales of assets;

•

offerings of securities;

•

indebtedness that First Advantage may incur; and

•

payments of any dividends.

First Advantage cannot assure you that First American’s ownership of First Advantage common stock or its relationship with First Advantage will not have a material adverse effect on the overall business strategy of First Advantage or on the market price of First Advantage Class A common stock.

Moreover, under recently proposed Nasdaq corporate governance rules, if a single stockholder holds more than 50% of the voting power of a company, that company is considered a “controlled company.” A controlled company is exempt from the Nasdaq rules requiring that a majority of the company’s board of directors be independent directors, that independent directors must have regularly scheduled executive sessions and that the compensation and nomination committees be comprised solely of independent directors. First American owns more

than 50% of the voting power of First Advantage and First Advantage expects to take advantage of such exemptions afforded to controlled companies if the proposed Nasdaq rules are enacted.

First Advantage has very little operating history as an independent company.

Before June 5, 2003, First Advantage had no operating history as a separate public company. Due to this lack of operating history as a separate public company, there can be no assurance that First Advantage’s business strategy will be successful on a long-term basis. Several members of First Advantage’s management team have never operated a stand-alone public company.

The financial statements of the FAST division included in this prospectus cover periods when the FAST division was owned and operated by First American and, accordingly, are not necessarily indicative of the results of operations, financial condition and cash flows that would have been achieved had the FAST division been operated independently during the periods and as of the dates presented. For example, in 2000, 2001 and 2002, First American forgave approximately $6.1 million, $35.2 million and $90.1 million, respectively, in amounts used by the FAST division for working capital and acquisition financing. Furthermore, historical financial statements may not reflect the costs to the FAST division of borrowing funds as a stand-alone entity. Therefore, the historical consolidated financial information of the FAST division included in this prospectus may not reflect First Advantage’s future results of operations, financial position and cash flows. You should consider the prospects of First Advantage based on the risks, expenses and difficulties frequently encountered in the operation of a new public company in a relatively new and evolving industry.

Pursuant to the standstill agreement entered into between First American and First Advantage, a majority of First Advantage’s “disinterested directors” must approve most future transactions between First American and First Advantage. First Advantage may need additional capital in order to finance operations or pursue acquisitions. Accordingly, First Advantage will have to obtain its own financing for operations and perform most of its own administrative functions. There can be no assurance that First Advantage will be able to develop successfully the financial and managerial resources and structure necessary to operate as an independent public company, or that First Advantage’s available financing and anticipated cash flow from operations will be sufficient to meet all of its cash requirements.

Prior to the recently completed mergers, First American performed certain administrative functions of the FAST division. Pursuant to the services agreement entered into in connection with the mergers, First American continues to provide certain of these services to First Advantage. If the services agreement is terminated, First Advantage will have to find alternative sources for these services. Such alternative sources may be more expensive or provide a different quality of services, which may adversely affect First Advantage’s results of operations.

Prior to the recently completed mergers, HireCheck, Employee Health Programs, SafeRent, Substance Abuse Management, American Driving Records and First American Registry were wholly-owned subsidiaries of First American and made up First American’s Screening Technology (FAST) division. These entities comprise a substantial portion of First Advantage’s assets. Prior to the mergers, the FAST division relied on First American for certain financial, administrative and managerial support, including strategic planning, general management support, legal support, treasury administration, insurance, personal property leasing, communications, corporate income tax administration, human resources, benefits, network services, and accounting and financial management services. The FAST division paid First American approximately $1.9 million, $1.4 million and $1.6 million in 2000, 2001 and 2002, respectively, for these support services. First American continues to provide certain of these support services to First Advantage under a services agreement. The initial term of the services agreement is for one year and the agreement will renew for successive six-month periods unless either First American or First Advantage gives 30 days notice of the intent to not renew before the end of any six-month period. Until such time as First Advantage can incur the capital expenditures and operating expenses necessary to support the functions covered by the services agreement, First Advantage intends to allow the agreement to renew automatically. However, there can be no assurance that First American will choose to renew the agreement after the initial one-year term. In the event that First American does not renew the agreement, First Advantage would have to arrange alternative sources for these services.

Other sources may be more expensive or be of a different quality, which could have a material adverse effect on the business and results of operations of First Advantage.

Prior to June 6, 2003, there was no public market for First Advantage Class A common stock and there is no guarantee an active trading market will develop.

First Advantage Class A common stock began trading on the Nasdaq National Market on June 6, 2003. There can be no assurance that an active trading market for First Advantage Class A common stock will develop or, if a trading market does develop, that it will continue. In the absence of such a market, you may be unable to liquidate readily your investment in First Advantage Class A common stock.

First Advantage is dependent on information suppliers. If First Advantage is unable to manage successfully its relationships with a number of these suppliers, the quality and availability of First Advantage’s services may be harmed.

First Advantage obtains some of the data used in its services from third party suppliers and government agencies. If a number of suppliers are no longer able or are unwilling to provide First Advantage with certain data, First Advantage may need to find alternative sources. If First Advantage is unable to identify and contract with suitable alternative data suppliers and integrate these data sources into its service offerings, First Advantage could experience service disruptions, increased costs and reduced quality of its services. Additionally, if one or more of First Advantage’s suppliers terminates First Advantage’s existing agreements, there is no assurance that First Advantage will obtain new agreements with third party suppliers on terms favorable to First Advantage, if at all. Loss of such access or the availability of data in the future due to increased governmental regulation or otherwise could have a material adverse effect on First Advantage’s business, financial condition and results of operations.

First Advantage may be subject to increased regulation regarding the use of personal information.

Certain data and services provided by First Advantage are subject to regulation by various federal, state and local regulatory authorities. Compliance with existing federal, state and local laws and regulations has not had a material adverse effect on the results of operations or financial condition of First Advantage or its subsidiaries to date. Nonetheless, federal, state and local laws and regulations in the United States designed to protect the public from the misuse of personal information in the marketplace and adverse publicity or potential litigation concerning the commercial use of such information may increasingly affect the operations of First Advantage, which could result in substantial regulatory compliance expense, litigation expense and a loss of revenue.

First Advantage faces significant security risks related to its electronic transmission of confidential information.

First Advantage relies on encryption and other technologies to provide system security to effect secure transmission of confidential or personal information. First Advantage may license these technologies from third parties. There is no assurance that First Advantage’s use of applications designed for data security, or that of third-party contractors will effectively counter evolving security risks. A security or privacy breach could:

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expose First Advantage to liability;

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increase First Advantage’s expenses relating to resolution of these breaches;

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deter customers from using First Advantage’s services; and

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deter suppliers from doing business with First Advantage.

Any inability to protect the security and privacy of First Advantage’s electronic transactions could have a material adverse effect on the business, financial condition or results of operations of First Advantage.

First Advantage could face liability based on the nature of its services and the content of the materials provided which may not be covered by insurance.

First Advantage may face potential liability from individuals, government agencies or businesses for defamation, invasion of privacy, negligence, copyright, patent or trademark infringement and other claims based on the nature and content of the materials that appear or are used in its products or services. Insurance may not be

available to cover claims of these types or may not be adequate to cover First Advantage for all risks to which it is exposed. Any imposition of liability, particularly liability that is not covered by insurance or is in excess of First Advantage’s insurance coverage, could have a material adverse effect on First Advantage’s reputation, business and results of operations.

First Advantage may not be able to pursue its acquisition strategy.

First Advantage intends to grow through acquisitions. First Advantage may not be able to identify suitable acquisition candidates, obtain the capital necessary to pursue its acquisition strategy or complete acquisitions on satisfactory terms. When companies are acquired, First Advantage may not be able to integrate or manage these businesses so as to produce returns that justify the investment.

A number of First Advantage’s competitors also have adopted the strategy of expanding and diversifying through acquisitions. First Advantage likely will experience competition in its effort to execute on its acquisition strategy, and First Advantage expects the level of competition to increase. As a result, First Advantage may be unable to continue to make acquisitions or may be forced to pay more for the companies it is able to acquire.

First Advantage may not be able to realize the entire book value of goodwill from acquisitions.

First Advantage has approximately $166.0 million of goodwill, as of March 31, 2003, including pro forma goodwill attributable to the recently completed business combination transaction. First Advantage has implemented the provisions of Statement of Financial Accounting Standards No. 142 “Goodwill and Other Intangible Assets” which requires that existing goodwill not be amortized, but instead be assessed annually for impairment or sooner if circumstances indicate a possible impairment. First Advantage will monitor for impairment of goodwill from past acquisitions completed by its subsidiaries and from future acquisitions. In the event that the book value of goodwill is impaired, any such impairment would be charged to earnings in the period of impairment. There can be no assurances that future impairment of goodwill under SFAS 142 will not have a material adverse effect on First Advantage’s results of operations.

First Advantage currently does not plan to pay dividends.

First Advantage intends to retain future earnings, if any, that may be generated from operations to help finance the growth and development of its business. As a result, First Advantage does not anticipate paying dividends to stockholders for the foreseeable future.

First Advantage’s business depends on technology that may become obsolete.

First Advantage expects to use US SEARCH’s DARWIN^{^™} technology and uses other information technology to better serve its clients and reduce costs. These technologies likely will change and may become obsolete as new technologies develop. The future success of First Advantage will depend upon its ability to remain current with the rapid changes in the technologies used in its business, to learn quickly to use new technologies as they emerge and to develop new technology-based solutions as appropriate. If First Advantage is unable to do this, it could be at a competitive disadvantage. First Advantage’s competitors may gain exclusive access to improved technology, which also could put First Advantage at a competitive disadvantage. If First Advantage cannot adapt to these changes, its business may be materially adversely affected.

First American could sell its controlling interest in First Advantage and therefore First Advantage could eventually be controlled by an unknown third party.

Subject to certain restrictions, First American could elect to sell all or a substantial or controlling portion of its equity interest in First Advantage to a third party without offering to First Advantage’s other stockholders the opportunity to participate in the transaction. If another party acquires First American’s interest in First Advantage, that third party may be able to control First Advantage in the same manner that First American is able to control First Advantage. A sale to a third party also may adversely affect the market price of First Advantage’s Class A common stock because the change in control may result in a change in management decisions, business policy and First Advantage’s attractiveness to future investors.

First Advantage Class A common stock will have minimal liquidity due to its small public float.

Although there were approximately 20,000,000 shares of First Advantage common stock outstanding immediately following the mergers, approximately 80% are owned by First American and approximately 11% are held of record by Pequot Private Equity Fund II, L.P. Currently only approximately 9% of First Advantage’s issued and outstanding shares are freely transferable without restriction under the Securities Act. Accordingly, only a minimal number of shares of First Advantage actually trade. As a result, there will likely be less trading volume and therefore less liquidity compared to other companies with similar market capitalization. Consequently, you may have difficulty selling your shares of First Advantage.

Significant stockholders may sell shares of First Advantage common stock which may cause First Advantage’s share price to fall.

Subject to certain restrictions, First American may at any time convert each of its shares of First Advantage Class B common stock into a share of Class A common stock. First American or Pequot Private Equity Fund II, L.P. may transfer shares of First Advantage common stock in a privately-negotiated transaction or to affiliates or shareholders. Any transfers, sales or distributions by First American or Pequot Private Equity Fund II, L.P. of a substantial amount of First Advantage’s Class A common stock in the marketplace, or to shareholders, or the market perception that these transfers, sales or distributions could occur, could adversely affect the prevailing market prices for First Advantage Class A common stock.

Conflicts of interest may arise because certain directors and officers of First Advantage are also directors and officers of First American.

Certain persons associated with First Advantage have a continuing relationship with First American. Parker Kennedy, John Lamson and Kenneth DeGiorgio, Chairman of the Board, Chief Financial Officer and General Counsel, respectively, of First Advantage, also serve as executive officers of First American and its affiliates. Mr. Kennedy also serves as President and a Director of First American. As such they may have great influence on business decisions of First Advantage. These persons, currently associated with First American, were asked to serve as directors and/or officers of First Advantage because of their knowledge of and experience with the business of First Advantage and its operations. All three own stock, and options to acquire stock, of First American.

These affiliations with both First American and First Advantage could create, or appear to create, potential conflicts of interest when these directors and executive officers are faced with decisions that could have different implications for First American and First Advantage. For example, business decisions made by the board of First American regarding its relationship with First Advantage under the services agreement could adversely affect First Advantage.

The stockholders agreement will impact corporate governance.

First Advantage, First American and Pequot Private Equity Fund II, L.P., US SEARCH’s majority stockholder prior to the mergers, have entered into a stockholders agreement pursuant to which First American has agreed to vote as many of its shares in First Advantage as is necessary to ensure that the board of directors of First Advantage has no more than ten members and that a representative of Pequot that meets certain requirements is elected a director of First Advantage or, at Pequot’s request, a board observer of First Advantage. Pequot’s right to designate

a board member or observer will continue until such time as Pequot’s and its affiliates’ collective ownership of First Advantage stock is less than 75% of the holdings Pequot received in the mergers. As a result of this arrangement and First American’s dominant ownership position in First Advantage, holders of First Advantage Class A common stock (other than Pequot) will have little or no ability to cause a director selected by such holders to be appointed to the board of directors of First Advantage and, consequently, little or no ability to influence the direction or management of First Advantage.

There may be risks related to the prior use of Arthur Andersen LLP as the auditor of SafeRent

The balance sheet and related statements of operations, owners’ equity and cash flows of SafeRent as of December 31, 2000, and for the year then ended, which have been included in the FAST division financial information in this prospectus, were audited by Arthur Andersen LLP. Despite First Advantage’s reasonable efforts to obtain Andersen’s consent, Andersen has not consented to the inclusion of its report in this prospectus. Under these circumstances, Rule 437a under the Securities Act permits First Advantage to file the registration statement which this prospectus forms a part of without a written consent from Andersen.

Section 11(a) of the Securities Act provides that if any part of a registration statement at the time it becomes effective contains an untrue statement of a material fact, or omits a material fact required to be stated therein or necessary to make the statements therein not misleading, any person acquiring a security pursuant to the registration statement (unless it is proved that at the time of the acquisition the person knew of the untruth or omission) may sue, among others, every accountant who has consented to be named as having prepared or certified any part of the registration statement, or as having prepared or certified any report or valuation which is used in connection with the registration statement, with respect to the statement in the registration statement, report or valuation which purports to have been prepared or certified by the accountant.

As a result of Andersen failing to consent to being named as an expert or to the inclusion of its report in the registration statement of which this prospectus forms a part, you will not be able to recover against Andersen under Section 11(a) of the Securities Act.

The balance sheet and related statements of operations, owners’ equity and cash flows of SafeRent as of December 31, 2001 and for the year then ended were also audited by Andersen, but have subsequently been restated for the classification and accounting for certain mandatorily redeemable preferred stock and, consequently, these financial statements are presented on an unaudited basis.

SELLING SHAREHOLDERS

In general, the persons to whom we issue shares of Class A common stock under this prospectus will be able to resell such shares in the public market without further registration and without being required to deliver a prospectus. However, certain persons who receive our Class A common stock may want to resell those securities in distributions that would require the delivery of a prospectus. With our consent, this prospectus may be used by certain shareholders who wish to sell our Class A common stock. As used in this prospectus, “selling shareholders” may include shareholders who receive our Class A common stock hereunder in connection with an acquisition and donees and pledgees selling shares received from such people. We may limit our consent to a specified time period and subject our consent to certain limitations and conditions, which may vary by agreement.

Selling shareholders may sell our Class A common stock in any combination of the following:

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through the Nasdaq National Market or any national securities exchange on which our Class A common stock has been approved for listing in the future;

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directly to purchasers in negotiated transactions;

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by or through brokers or dealers, in ordinary brokerage transactions or transactions in which the broker solicits purchases;

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in block trades in which the broker or dealer will attempt to sell securities as an agent but may position and resell a portion of the block as principal;

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in a transaction in which a broker or dealer purchases as principal for resale for its own account; or

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through underwriters and agents.

Resales by selling shareholders may be made directly to investors or through securities firms acting as underwriters, brokers or dealers. The fees earned by or paid to the securities firm may be the normal stock exchange commission or negotiated commissions or underwriting discounts to the extent permissible. Shares of our Class A common stock may be sold at a fixed offering price, which may be changed, at the prevailing market price at the time of sale, at prices related to such prevailing market price or at negotiated prices. The securities firm may resell the shares through other securities dealers, and commissions or concessions to those other dealers may be allowed. Such selling shareholders may indemnify any securities firm participating in such transactions against certain liabilities, including liabilities under the Securities Act and to reimburse them for any expenses in connection with an offering or sale of securities.

The selling shareholders and any broker-dealers who act in connection with the sale of shares hereunder may be deemed to be an “underwriter” within the meaning of the Securities Act. Any commissions received by them and profit on any resale of such shares as principal may be deemed to be underwriting discounts and commissions under the Securities Act.

Selling shareholders may also offer shares of Class A common stock covered by this prospectus by means of prospectuses under other registration statements or pursuant to exemptions from the registration requirements of the Securities Act, including sales that meet the requirements of Rule 144 or Rule 145(d) under the Securities Act. Selling shareholders should seek the advice of their own counsel about the legal requirements for such sales.

This prospectus will be amended or supplemented, if required by the Securities Act and the rules of the SEC, to disclose identity of the selling shareholders, the number of shares to be sold by the selling shareholders, any material relationship a selling shareholder may have with us, and other details of the resale to the extent appropriate.

We will not receive any part of the proceeds from the resale by the selling shareholders of any shares under this prospectus. We will bear all expenses other than selling discounts and commissions and fees and expenses of the selling shareholders in connection with the registration of the shares being re-offered by the selling shareholders.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains “forward-looking statements.” These forward-looking statements are based on estimates and assumptions made by management and take into account only the information available at the time the forward-looking statements are made. Although we believe our estimates and assumptions are and will be reasonable, forward-looking statements involve risks, uncertainties and other factors that could cause our actual results to differ materially from those suggested in the forward-looking statements. Forward-looking statements include the information concerning future financial performance, anticipated benefits of the mergers, business strategy, projected plans and objectives of First Advantage and its subsidiaries, prospective products, sales and marketing efforts, costs and expenses, liquidity, cost savings and the other forward-looking statements contained in this prospectus, including:

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pro forma financial data for First Advantage, US SEARCH and the companies formerly comprising the FAST division;

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the anticipated benefits of the recently completed mergers;

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the production and expected use of US SEARCH’s DARWIN^™ technology; and

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projected financial results of First Advantage, the companies formerly comprising the FAST division and US SEARCH;

Forward-looking statements are subject to numerous risks and uncertainties. The following are some important factors that could cause First Advantage’s actual results to differ materially from those in forward-looking statements:

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general volatility of the capital markets and the market price of First Advantage Class A common stock;

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First Advantage’s ability to successfully raise capital;

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First Advantage’s ability to identify and complete acquisitions and successfully integrate businesses it acquires (including HireCheck, Employee Health Programs, SafeRent, Substance Abuse Management, American Driving Records, First American Registry and US SEARCH);

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changes in applicable government regulations;

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the degree and nature of First Advantage’s competition;

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an increase in First Advantage’s expenses;

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continued consolidation among First Advantage’s competitors and customers;

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technological changes may be more difficult or expensive than anticipated; and

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other factors described in the section entitled “RISK FACTORS” beginning on page 6.

First Advantage’s actual results, performance or achievement could differ materially from those expressed in, or implied by, forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations and financial condition of First Advantage. The forward-looking statements speak only as of the date they are made. First Advantage does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

INFORMATION ABOUT FIRST ADVANTAGE

First Advantage is a newly created public company. On June 6, 2003, First Advantage’s Class A common stock commenced trading on the Nasdaq National Market under the symbol “FADV”.

On June 5, 2003, pursuant to the Merger Agreement, HireCheck, Inc., Employee Health Programs, Inc., SafeRent, Inc., Substance Abuse Management, Inc., American Driving Records, Inc. and First American Registry, Inc., each formerly a wholly-owned subsidiary of First American and collectively comprising The First American Corporation Screening Technology (FAST) division, and US SEARCH, then a public company whose common shares were traded on the Nasdaq National Market under the symbol “SRCH”, became wholly-owned operating subsidiaries of First Advantage.

The business of First Advantage, operated through its wholly-owned subsidiaries, are the businesses conducted by such entities.

Business of US SEARCH

Overview

First Advantage, through its subsidiary US SEARCH, is an individual locator and risk management services company, which uses its proprietary software platform and web-based systems to supply consumer and business clients with services such as individual location, identity verification, criminal record checks, employment and education verifications. US SEARCH’s wholly-owned subsidiary, Professional Resource Screening, provides employment screening services, including identity verification, criminal record checks, employment and education verifications, professional reference checks, credit and motor vehicle record checks, and drug screening. Professional Resource Screening has more than 500 large business clients, including AT&T Wireless, The AIG Life Companies, Bell South Corporation, Charles Schwab and DHL Worldwide Express.

US SEARCH has developed US SEARCH DARWIN^{^™} patent-pending technology, which automates the data management supply chain by accessing, assimilating, and compiling data from disparate sources. The current applications of the technology focus on individual locator and profile services. US SEARCH has developed the technology’s application to employment screening services and expects that it will be in production for US SEARCH’s business customers in 2003. By automating the fulfillment process for employment screening, US SEARCH believes it will be able to deliver a superior quality product more quickly and more efficiently.

US SEARCH Services

US SEARCH offers a variety of products and services to provide accurate and timely background information. US SEARCH’s services are highly automated—its clients online can conduct many of US SEARCH’s services instantly. US SEARCH also offers assisted searches and screening services, both online and through toll free telephone numbers.

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Large Business Services. US SEARCH, through its subsidiary Professional Resource Screening, provides large businesses, government agencies and other employers with a variety of employment screening, individual and

business background check and risk mitigation products and services via an online, web-based system that enables instant ordering and prompt delivery of results. Employment screening products include Social Security Number Trace, Federal and State Felony and Misdemeanor Record Searches, Employment and Education Verification, Motor Vehicle Records and Credit History. US SEARCH also provides character reference checks and drug screening via third party providers. US SEARCH also offers a Management Services program that provides customers with an outsourced solution to background investigations. Finally, US SEARCH recently developed ApplyDirect^™, a web-based application tool designed to reduce recruiting costs and improve time-to-hire by allowing job candidates to electronically complete and sign employment application forms.

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Small and Medium Business Services. US SEARCH provides small and medium businesses with a variety of services including individual locator, individual and business background checks and employment screening. Small and medium business clients may use US SEARCH’s services to find missing beneficiaries, debtors, alumni, witnesses, shareholders and pension plan participants, perform due diligence on individuals and businesses before entering into a business or financial relationship, research identity fraud, verify property ownership or screen employees before making a hiring decision. US SEARCH’s customers may access a new small and medium business website at www.ussearch.com/business.

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Consumer Services. US SEARCH provides consumer clients with a single, comprehensive access point to a broad range of information to assist them in locating friends and relatives or learn more information about people in their lives.

Marketing and Brand Awareness

US SEARCH markets its services through a direct sales force, strategic partnerships and Internet advertising featuring the US SEARCH brand. Given the current attention being paid to security issues, US SEARCH intends to develop channel relationships with leading management consultants, systems integrators, HR information systems providers and HR outsourcing companies to make US SEARCH DARWIN^™ technology and services available as a component of their offerings.

US SEARCH intends to continue to strengthen its brand through Internet advertising programs, direct mail, e-mail campaigns, and public relations programs. US SEARCH plans to target an increasing portion of marketing and advertising programs and related expenditures toward business and professional clients rather than consumers.

Marketing to Corporate and Professional Clients. US SEARCH has established a direct business sales force and a team of research specialists to promote and increase the marketing of its services to prospective professional and corporate clients and to address the specific needs of each corporate and professional client. US SEARCH is targeting certain industries, such as transportation, retail, healthcare, financial services, and insurance markets for its employment screening services.

Internet Advertising

US SEARCH believes that marketing agreements with Internet search engines and popular websites have increased brand recognition and attracted clients. US SEARCH generates visitors to its website from various forms of Internet advertising, such as banners, buttons, text links and integrated order forms. US SEARCH maintains marketing agreements with leading Internet search engines and popular websites, and has placement on major websites such as AOL.com, Yahoo.com, Google.com, MSN.com, InfoSpace.com, Netscape.com, Lycos.com, Whitepages.com, Classmates.com, and Overture.com. US SEARCH believes that these sites reach a growing base of Internet users that engage in both business and consumer transactions.

US SEARCH plans to continue to use Internet advertising to acquire clients. During 2002, US SEARCH endeavored to negotiate Internet advertising placements that were targeted to achieve customer acquisition and continued to negotiate performance based payment models. In addition, US SEARCH developed lower-cost supplemental client acquisition programs, including its affiliate marketing program that works with a wide variety of smaller websites, commissioning these affiliates on revenue share basis. US SEARCH also intends to develop strategic marketing relationships with other companies based upon traffic patterns, customer profiles and related services, to increase its revenue from the Internet, primarily on a revenue share or other performance basis.

Competition

The data and information service industry is highly competitive and currently fragmented, although there has been a recent trend toward consolidation. US SEARCH’s primary competitors for business services include ADP, ChoicePoint, Inc., Kroll, USIS and TALX. Currently, US SEARCH’s primary competitors in the area of individual locator searches include telephone companies and other third parties, who publish free printed or electronic directories, private investigation firms and KnowX.com.

Third Party Suppliers

US SEARCH does not independently maintain most of the databases from which it gathers information for its current services, but instead relies on a limited number of third party suppliers. If one or more of US SEARCH’s current data suppliers terminates existing agreements, US SEARCH may not be able to obtain new agreements with third party suppliers on favorable terms, if at all. Therefore, US SEARCH continually seeks additional data sources with the goal of adding new products and services and decreasing its dependence on a limited number of suppliers of data for its current products and services.

Technology and Infrastructure

During 2002, US SEARCH implemented its DARWIN^{^™} proprietary software platform, which uses advanced technology to access, assimilate, compile, distribute and present data from disparate public and private databases. US SEARCH’s patent application on this technology was published on December 19, 2002.

During 2002, US SEARCH completed development of the initial phase of its Corporate Services Platform that provides support for customers of its screening services. US SEARCH believes this platform automates many of the activities of the screening business and enhances fulfillment productivity and accuracy. In addition, US SEARCH has further enhanced its eCommerce, Customer Relationship Management and proprietary technology developments which utilize the industry standard J2EE technology platform to enhance the interoperability of its software systems, provide improved scaling capability and provide further efficiencies in the software development group by standardizing on a single development platform. US SEARCH’s XML-based messaging framework enables seamless exchange of data with client-partner systems.

US SEARCH has scaled its hardware infrastructure to accommodate the increased traffic to its sites and has attempted to provide redundancy at all levels of the architecture in an effort to minimize unanticipated processing interruption.

Patents and Trademarks

US SEARCH’s patent application on its US SEARCH DARWIN^{^™} technology was published on December 19, 2002 and is pending issuance. US SEARCH is the owner of registered trademarks for “1-800-USSEARCH”, “The Public Record Portal,” its logo, “Reuniting America Two People at a Time,” “VeroTrust,” “FraudIdentity,” and “TrustIdentity” and has applied for registered trademark status for “US SEARCH.com.” US SEARCH has also registered several domain names, including 1800USSEARCH.com, ussearch.com, prsinet.com and verotrust.com.

Governmental Regulation

Although none of US SEARCH’s products or services require US SEARCH to obtain governmental approvals, US SEARCH is subject to various federal and state regulations that impact its products and services. For example, employment screening is regulated by the federal Fair Credit Reporting Act (FCRA), various state law equivalents, as well as federal and state laws and regulations intended to prevent employment discrimination. US SEARCH’s consumer business is affected by the Gramm-Leach-Bliley Financial Services Modernization Act of 1999 (GLB). Federal preemption of privacy laws has been discussed at the federal level since the passage of the GLB. Presently, however, state legislatures, attorneys general, and state regulatory bodies are responding to a perceived need for increased privacy protection in the absence of strong federal legislation that is preemptive. States have taken increased action on privacy-related legislation.

Research and Development Activities

Over the last three years US SEARCH has spent considerable funds developing its proprietary technology and websites. In fiscal years 2000, 2001 and 2002, respectively US SEARCH spent $6.0 million, $7.8 million and $5.4 million on research and development activities.

Businesses of American Driving Records, SafeRent, First American Registry, HireCheck, Employee Health Programs and Substance Abuse Management (collectively the former FAST division of The First American Corporation)

Services

Motor Vehicle Reports. First Advantage, through its subsidiary American Driving Records, provides automated access to driving records from all 50 states and the District of Columbia. Insurance companies represent the core of the customer base for this product, which they use for underwriting purposes. Employers also utilize the product to manage risk associated with employees that require the use of a vehicle in the performance of their duties. For most customers, American Driving Records receives and fulfills orders through its proprietary software known as Comprise/ZapApp software, which allows the customer to integrate the process of obtaining motor vehicles reports with other processes utilized by the customer. Generally, demand for this product decreases in November and December as a result of seasonal reductions in the insurance and employment markets.

Tenant Screening. First Advantage, through its subsidiaries SafeRent and First American Registry, provides tenant screening services to landlords and managers of multifamily residential properties. These services include reports containing information derived from databases of eviction records, major credit bureaus, provided references and criminal records. Depending on a customer’s needs, reports can draw on any combination of these sources. One of the products, for example, provides customers with a comprehensive report of rental history and eviction filings drawn on First Advantage’s proprietary database. Customers also can order products which assess risk of default by a potential tenant based on a statistical model. Customers generally order and receive the division’s tenant screening products through a secure Internet connection or through software. In these services SafeRent and First American Registry experience moderate seasonality, with a slightly disproportionate share of revenue being generated from March through October.

Employee Background Screening. First Advantage, through its subsidiary HireCheck, provides employee background screening services to thousands of companies in the United States. These services include reports about a prospective employee’s criminal record, motor vehicle violations, credit standing and involvement in civil litigation. First Advantage, through its subsidiary HireCheck also makes inquiries of provided references and former

employers, verifies educational credentials and licenses and checks industry specific records. A customer can order any of these and other related services individually or as a package. Depending on a customer’s preference, orders may be placed and fulfilled directly from HireCheck, through a secure Internet connection, via facsimile or through third party vendors. Because of the diverse clientele for the employee background screening products, seasonality is minimal. Generally, First Advantage experiences any lull in the demand for its screening products near year end and during the summer, when employers typically slow their hiring pace.

Occupational Health. First Advantage, through its subsidiaries Employee Health Programs and Substance Abuse Management, also provides its customers with a comprehensive set of occupational health services, which helps employers manage occupational health issues with respect to both prospective and existing employees. Generally, these products involve first the design and implementation of a drug testing program, including provision for the collection and testing of specimens. Through its staff of doctors, Employee Health Programs and Substance Abuse Management then interpret the results. Ultimately, a report is delivered to customers through a secure Internet connection or through other direct means.

First Advantage, through its subsidiary Employee Health Programs, also develops and manages employee assistance programs, which provide troubled employees with access to confidential counseling services. These programs cover a wide range of personal and workplace issues, including alcohol and drug abuse, marital problems, family matters, bereavement management, depression, stress, retirement and downsizing. Employee Health Programs’ employee assistance programs also provide employers with a number of corporate-focused services, including critical incident stress management programs, organizational change consulting and intensive specialty training on issues such as violence in the workplace.

Approximately 75% of First Advantage’s occupational health business is derived from employment screening, with the balance attributable to ongoing drug testing programs and employee assistance programs.

As with its employee background screening products, any seasonality in the demand for First Advantage’s occupational health products generally is attributable to decreases in hiring which occur near year end and during the summer.

First Advantage also owns 100% of the voting and economic interest in First American Indian Holdings LLC, which was contributed by First American to First Advantage as part of the recently completed mergers. First American Indian Holdings and American Driving Records own ZapApp India Private Limited, a company that provides software development services to First Advantage.

Historical Growth of the First American Screening Technology (FAST) Division

Prior to the recently completed mergers, HireCheck, Employee Health Programs, SafeRent, Substance Abuse Management, American Driving Records and First American Registry, now wholly-owned subsidiaries of First Advantage, were wholly-owned subsidiaries of First American and made up The First American Corporation Screening Technology (FAST) division.

In the late 1990s, First American initiated a diversification strategy which called for, among other things, the combination of one of its core competencies—data management and analysis—with businesses that are counter-cyclical to its long-standing real estate related products and services. First American also sought businesses that were complementary to its rapidly growing credit reporting business, First American CREDCO. First American management initially focused on the background screening industry—an information-intensive business with a heavy demand for credit reports and a relatively tangential tie to the real estate market.

Employee Background Screening. In September 1998, First American began its entry into the background screening industry by acquiring HireCheck. HireCheck, headquartered in St. Petersburg, Florida, provides a wide range of employee screening services for a diverse group of companies. Depending on the type of product ordered, the reports generated by HireCheck provide information about a prospective employee from a number of sources, including criminal records, motor vehicle reports, credit reports, civil litigation records, prior employers, educational institutions, licensing authorities, employee references and certain other records specific to the industry in which the customer operates.

Tenant Screening. In September 1998, First American also entered the tenant screening industry by acquiring First American Registry, headquartered in Rockville, Maryland. First American Registry, the largest tenant screening company in the United States, gives property managers and landlords in the multifamily housing industry the tools required to evaluate prospective tenants. These tools include access to First American Registry’s database of landlord-tenant court records, which is the largest of its kind in the United States, and its database of criminal conviction information, which is one of the largest for use in tenant screening in the country. These tools also include access to credit reports, a credit scoring model developed exclusively for the multifamily housing industry and reference checking.

Occupational Health. Continuing its efforts to provide a comprehensive set of risk management tools to its customers, in August 2001, First American entered the occupational health services business by acquiring Milwaukee, Wisconsin-based Substance Abuse Management. This company manages for employers the collection of drug test specimens, the actual testing of the specimens and the interpretation and delivery of results.

Motor Vehicle Reports. Five months later, in January 2002, First American further added to the menu of services offered by the FAST division by acquiring American Driving Records, a Rancho Cordova, California-based provider of motor vehicle reports. One of the largest competitors in its industry, American Driving Records brought to the FAST division not only a formidable player in a key area of the risk management industry, but also enhanced access to the driving records of almost every state in the United States. With American Driving Records, First American purchased ZapApp India Private Limited, a Bangalore, India-based private limited company that provides web development services to American Driving Records.

Consolidation

In an effort to improve the profitability of the companies then comprising the FAST division, in the second quarter of 2001, First American reorganized the division’s management structure by dedicating a single management group to the oversight of all operations. By emphasizing the group as a whole, this reorganization effort positioned the FAST division to pursue cross-selling opportunities, take advantage of mutual supplier relationships and leverage technological developments and resources across the entire division. It also had the effect of focusing management on efforts to improve the division’s operating margins by increasing the volume of transactions performed using the division’s existing systems, whether through internal sales growth or by acquiring businesses with complementary product offerings. In January 2002, First American formally created the FAST division and began reporting it as a segment in its financial statements.

Strategic Acquisitions Following 2001 Reorganization

First American supplemented the division’s employee background screening operations by acquiring Factual Business Information, Inc., headquartered in Miami, Florida, in August 2001 and Pretiem Corporation, headquartered in Princeton Junction, New Jersey, in December of 2001. These acquisitions provided the division with a customer base for employee background screening services in three important employment markets: the Miami metropolitan area, New Jersey and New York State.

In the last quarter of 2002, the FAST division completed acquisitions of Employee Health Programs in October and SafeRent in November.

Employee Health Programs. A competitor of Substance Abuse Management, the Bethesda, Maryland-based Employee Health Programs brought critical volume to the FAST division’s occupational health business. Through the acquisition of Employee Health Programs, the FAST division also expanded the scope of its existing services to include employee assistance programs, which are designed to help troubled employees resolve behavioral and/or emotional problems and achieve their full productive capability.

SafeRent. SafeRent, headquartered in Denver, Colorado, brought many new customers to the FAST division’s leading tenant screening business and increased the division’s penetration in key markets, in particular markets in the western United States.

Customers

First Advantage’s subsidiaries formerly making up the FAST division serve a wide variety of clients throughout the United States, including a substantial percentage of those businesses comprising the Fortune 1000,

many major real estate investment trusts and property management companies, a number of the top providers of transportation services, governmental agencies, non-profit organizations and health care providers. Dominant categories of customers vary depending on the type of product. Insurance carriers and agents, for example, purchase a substantial proportion of American Driving Records’ products. Transportation companies are major consumers of the occupational health products. Multifamily housing property management companies and landlords of all sizes are represented in the tenant screening business’ customer base. Larger employers represent the predominant share of the employee background screening business. First Advantage’s subsidiaries formerly making up the FAST division derive a nominal amount of revenue from customers in Canada and Puerto Rico.

First Advantage’s subsidiaries formerly comprising the FAST division have in excess of 10,000 customers. No single customer is responsible for 2 percent or more of the revenue of the entire division.

Suppliers

Data represents a key ingredient of First Advantage’s background screening, tenant screening and driving records products provided by its former FAST division companies. In obtaining such data, First Advantage draws upon a wide variety of sources, including governmental agencies, credit reporting agencies, third parties which compile public record information and on-line search services. Many of First Advantage’s suppliers provide this data in electronic format. First Advantage does not anticipate the termination of any significant relationship with any of its data suppliers. Because First Advantage believes it could acquire necessary data from other sources, First Advantage does not believe that the termination of any supplier relationship would have a material adverse effect on it’s financial condition or operating results.

In connection with its occupational health services, First Advantage depends upon services provided by specimen collection agencies and laboratories. There is significant competition among suppliers of these services and, consequently, First Advantage does not believe the termination of its relationship with any of these suppliers would have a material adverse effect on its financial condition or operating results.

First Advantage’s subsidiaries formerly making up the FAST division have historically relied on First American for certain financial, administrative and managerial support, including strategic planning, general management support, legal support, treasury administration, insurance administration, corporate income tax administration, human resources, benefits, network services, and certain accounting and financial management services. The FAST division paid First American approximately $1.9 million, $1.4 million and $1.5 million in 2000, 2001 and 2002, respectively, for these support services. First American will continue to provide certain of these support services to First Advantage under a services agreement.

Governmental Regulation

Although none of the products or services of the companies making up the former FAST division requires governmental approvals, these companies are subject to various federal and state regulations that may impact their products and services. For example, the federal Fair Credit Reporting Act and various state laws regulate products and services that include disclosure of personal information. Historically, the FAST division has been able to comply with existing laws and regulations without incurring substantial costs or restrictions on it business.

Competition

A number of companies compete with the former FAST division’s product offerings. First Advantage’s most significant national competitors in employee background screening include ChoicePoint, Kroll, U.S. Investigative Services and ADP. A number of local and regional competitors also exist. The tenant screening industry is highly fragmented, with only approximately 10 other companies providing significant competition on a national level. In its occupational health business, First Advantage has one significant nationwide competitor, however, there are a significant number of relatively local and regional companies in the industry. In motor vehicle reports, there are approximately 10 major competitors to First Advantage, the most predominant of which is ChoicePoint. In each of these markets, First Advantage competes foremost on the basis of customer service and secondarily on price and product differentiation.

Intellectual Property

First Advantage’s subsidiaries making up the former FAST division own a number of items of intellectual property, including trademarks, tradenames, copyrights, patents, domain names and unregistered trade secrets. First Advantage is not dependent upon any single item of intellectual property.

The web site of First Advantage is www.fadv.com.

Strategies for Future Growth of First Advantage

First Advantage believes that as the world becomes increasingly risky for individuals and organizations, demand for the risk management products offered by its former FAST division companies and by US SEARCH will grow. These companies’ primary goal is to be well positioned to capture not only a substantial portion of the existing market, but also a substantial share of the expected growth. First Advantage intends to help these companies accomplish this goal in the following manner:

Consolidate Operations. First Advantage intends to continue its aggressive efforts to consolidate the operations of the former FAST division and the operations of US SEARCH. This includes efforts not only to capture synergies by eliminating personnel and systems duplication, but also to exploit cross-selling opportunities by providing a single platform on which First Advantage can offer its entire menu of services to current and prospective customers. In the short term, First Advantage believes these efforts could result in the elimination of up to 5% of the former FAST division’s and US SEARCH’s total employee base.

Pursue Strategic Acquisitions. First Advantage also intends to continue pursuing acquisitions of companies that would enable it to enter new markets as well as increasing its share of those markets in which it is already operating. It will pursue companies with assets that will enhance First Advantage’s ability to fulfill orders, including companies with proprietary databases containing information for use in its products or technology that would make order placement or product delivery more efficient. First Advantage also expects to pursue acquisition opportunities which would enable it to enter into related product fields. The FAST division’s recent acquisitions of Employee Health Programs and SafeRent are examples of the efforts to increase the volume of transactions performed by First Advantage’s existing businesses through strategic acquisitions. The recently completed business transaction with US SEARCH provides an example of First Advantage’s efforts to enhance its technology (through US SEARCH’s DARWIN^{^™} platform) and to enter related product fields (location services) through acquisition.

Overseas Production. To cut costs, First Advantage intends to expand its production efforts overseas. Currently, First Advantage’s operations in Bangalore, India provide a portion of its software development needs. First Advantage plans to expand the software development activities of its Bangalore facility and to examine other potential cost saving opportunities it may provide, such as the performance of certain back office functions and the running of a customer service call center.

Employees

First Advantage employs, through its subsidiaries, over 900 people in the aggregate, most of which are located in the United States. First American Indian Holdings LLC employs 12 people at its development facility in Bangalore, India.

Properties

First Advantage’s principal executive offices are located in 30,000 square feet of leased office space in St. Petersburg, Florida. The lease expires on February 29, 2008 with no option to renew. Monthly rent is approximately $62,000. First Advantage, through HireCheck, First American Registry, Substance Abuse Management, American Driving Records, Employee Health Programs, SafeRent, First American Indian Holdings LLC, US SEARCH and PRSI, maintains 18 other offices in the United States and an office in Bangalore, India. These offices, all of which are leased, comprise a total of approximately 188,500 square feet of space.

Legal Matters

HireCheck, First American Registry, Substance Abuse Management, American Driving Records, Employee Health Programs, SafeRent, US SEARCH and their subsidiaries are involved in litigation from time to time in the

ordinary course of their businesses. First Advantage does not believe that the outcome of any pending or threatened litigation involving these entities will have a material adverse effect on its financial position or operating results.

Employee Benefit Plans

First Advantage is honoring all outstanding stock options, stock appreciation rights, limited stock appreciation rights, stock purchase rights and warrants of US SEARCH outstanding before the mergers. First Advantage intends to offer its employees participation in certain of First American’s benefit plans for a period of time following the closing of the mergers. Non-employee directors and certain employees and consultants of First Advantage and its subsidiaries are also eligible to participate in the First Advantage Corporation 2003 Incentive Compensation Plan. Participation in the First Advantage Corporation 2003 Employee Stock Purchase Plan is also offered to eligible employees of First Advantage.

First American Benefit Plans

First Advantage employees may elect to participate in a selection of medical plans to fit their needs as well as a dental plan, a vision plan, various coverage levels of life and disability benefits. Employees are eligible to participate in these plans after completion of 30 days of continuous active service and if such employees are regularly scheduled to work at least 30 hours a week. The First American 401(k) Savings Plan (Restatement effective as of January 1, 2001) (the “401(k) Savings Plan”), a defined contribution plan intended to qualify under Section 401(k) of the United States Internal Revenue Code, is available to employees of First Advantage who complete at least 30 days of continuous active service and are at least 21 years old. Each participant is able to elect to defer from 1% to 15% of the participant’s pretax annual compensation, subject to certain limits, which are prescribed by the Internal Revenue Code and adjusted for inflation periodically. Matching contributions and profit-sharing contributions may be made under the plan. Elective deferral and employer contributions are fully vested at all times. Upon retirement or other termination of employment, a participant’s account balance will be distributable to the participant (or to the participant’s beneficiary) in accordance with the participant’s election. Distributions of a participant’s account balance may be withdrawn during their employment in order to satisfy an immediate and heavy financial need that cannot reasonably be satisfied from other sources. The 401(k) Savings Plan permits participants to borrow a portion of their vested account balances pursuant to a uniform and non-discriminatory loan program.

Employees of First Advantage and its subsidiaries who were participants in First American’s defined benefit pension plan prior to the recently completed mergers and who have become employees of First Advantage in connection with the mergers generally are permitted to continue their participation in the plan, to the extent available to employees of First American. No new participants will be permitted to participate in the defined benefit pension plan.

First American maintains an executive supplemental benefit plan and a management supplemental benefit plan that it believes assists in attracting and retaining highly qualified individuals for upper management positions. Both plans provide retirement benefits for, and pre-retirement death benefits with respect to, certain key management personnel selected by First American’s board of directors, and may include executives of First Advantage at and to the extent selected by First American’s board of directors. Under the executive plan, upon retirement at normal retirement date (the later of age 65 or, unless waived by First American’s board of directors, completion of 10 years of service), a participant receives a joint life and 50% survivor annuity benefit equal to 35% of “final average compensation.” Under the management plan, upon retirement at normal retirement date (the later of age 65 or, unless waived by First American’s board of directors, completion of 10 years of service), a participant receives a joint life and 50% survivor annuity benefit equal to 15% of “final average compensation.” “Final average compensation” under both plans is the average annual compensation, composed of base salary, plus cash and stock bonuses, for those three calendar years out of the last 10 years of employment preceding retirement in which such compensation is the highest. The benefit under the executive plan is reduced by 5% for each year before normal retirement date in which retirement occurs and, until age 70, increased by 5% (compounded in order to approximate the annuitized value of the benefit had retirement occurred at age 65) for each year after such date in which retirement occurs. With respect to such postponed retirement, the executive plan takes into account covered compensation received until age 70, so that the retirement benefit of an executive who retires after normal retirement date is equal to the greater of the annuitized benefit or the benefit calculated using final average compensation until age 70. The retirement benefit under the management plan does not take into account compensation received after

the normal retirement date, and no benefit is payable to a participant who retires prior to the normal retirement date unless the participant has been employed by First American or a subsidiary for at least 15 years and the First American board grants consent. To be eligible to receive benefits under the plans, a participant must be at least age 55, have been an employee of First American, or an employee of one of its subsidiaries, for at least 10 years and, unless waived by First American’s board of directors, covered by the plan for at least five years. A pre-retirement death benefit is provided under both plans consisting of 10 annual payments, each of which equals 50% of final average compensation. Vesting of rights under the plan is accelerated in the event of a change in control (as defined in the plan) of First American. Both of the plans are unfunded. First American purchases insurance, of which First American is the owner and beneficiary, on the lives of the participants in the plans. This insurance is designed to recover, over the life of each plan, First American’s costs incurred with respect to the plan. Currently, only 48 employees have been selected by the First American board to participate in the executive plan, and only 61 employees have been selected by the First American board to participate in the management plan.

First American’s deferred compensation plan offers to a select group of management and highly compensated employees of First American and its subsidiaries, including First Advantage, the opportunity to elect to defer portions of salary, commissions and bonuses. A committee appointed by First American’s board is responsible for administering the plan, which became effective January 1, 1998. First American maintains a deferral account for each participating employee on a fully vested basis for all deferrals. Participants can choose to receive cash benefits in one lump sum or in quarterly payments upon termination of employment or death. Subject to the terms and conditions of the plan, participants also may elect to schedule in-service withdrawals of deferred compensation and the earnings and losses attributable thereto. For all participants who joined the plan prior to December 31, 2001, the plan provides a pre-retirement life insurance benefit equal to the lesser of 15 times the amount deferred in a participant’s first year of participation or $2.0 million. The life insurance benefit is reduced beginning at age 61 by 20% per year. Participants who join the plan after December 31, 2001, are not eligible for any life insurance benefit. First American pays the premiums for such life insurance benefits. The plan is unfunded and unsecured.

First Advantage Corporation 2003 Incentive Compensation Plan

The 2003 First Advantage Incentive Compensation Plan is intended to promote the long-term success of First Advantage and increase stockholder value by attracting, motivating, and retaining key employees of First Advantage and its subsidiaries and affiliates, and by motivating consultants who provide significant services to First Advantage and its subsidiaries and affiliates. To achieve this purpose, the plan allows the granting of stock options, stock appreciation rights, restricted stock awards, performance unit awards, performance share awards and cash-based awards to eligible persons.

Subject to adjustment for certain changes in First Advantage’s capitalization, a total of 3.0 million shares of First Advantage Class A common stock are available for issuance under the plan.

The plan is administered by the compensation committee of the board of directors of First Advantage, or another committee appointed by the First Advantage board. The committee has the exclusive discretionary authority to operate, manage and administer the plan in accordance with its terms. Subject to the terms of the plan, the committee has the sole discretion to determine the employees and consultants who will be granted awards, the size and types of such awards, and the terms and conditions of such awards. The committee determines the form and content of award agreements that grant awards under the plan. The committee interprets the plan and award agreements thereunder and has authority to correct any errors, supply any omissions and reconcile any inconsistencies in the plan and/or any award agreements. The committee’s decisions and actions concerning the plan are final and conclusive. Non-employee directors of First Advantage receive automatic grants of a set number of options upon initial election and re-election to the First Advantage board.

Upon the occurrence of a change of control transaction (as defined in the plan), generally all awards under the plan accelerate, all restrictions are lifted and all performance goals are achieved, subject to certain limitations. The committee may provide that any award, the payment of which was deferred under the plan, will be paid or distributed as of, or promptly following, a change of control transaction. The committee may also provide that any awards subject to any such acceleration, payment, adjustment or conversion cannot be exercised after, or will terminate as of, a change of control transaction.

First Advantage Corporation 2003 Employee Stock Purchase Plan

The First Advantage Corporation 2003 Employee Stock Purchase Plan, which is intended to qualify under Section 423 of the Internal Revenue Code, allows eligible employees to purchase First Advantage Class A common stock through payroll deductions for 85% of the fair market value of the First Advantage Class A common stock. Participation in the plan is voluntary. Eligible employees may participate by authorizing payroll deductions of up to 15% of their base pay for each payroll period. At the end of each one-month offering period, each participant receives an amount of First Advantage Class A common stock equal to the sum of that participant’s payroll deductions during such period divided by 85% of the fair market value of the common stock at the end of the period. No employee may participate in the plan if such employee owns or would own after the purchase of options under the plan, 5% or more of the voting power of all classes of First Advantage stock. Shares of First Advantage Class A common stock issued under the plan must be held for a period of one year. A total of 1.0 million shares of First Advantage Class A common stock are reserved for issuance under the plan.

PRICE RANGE OF COMMON STOCK AND DIVIDENDS

On June 6, 2003, the first day on which First Advantage Class A common stock was listed on the Nasdaq National Market (under the symbol “FADV”) there were approximately 105 holders of record and approximately 3,500 beneficial holders of First Advantage Class A common stock. The average of the high and low sales prices of one share of First Advantage Class A common stock on June 27, 2003 as reported on the Nasdaq National Market was $16.96.

Historical market prices for First Advantage Class A common stock are not available because the Class A common stock was not publicly traded prior to June 6, 2003.

First Advantage has never paid any cash dividends, and does not presently intend to pay dividends in the foreseeable future.

SELECTED HISTORICAL FINANCIAL INFORMATION OF US SEARCH

The selected financial data of US SEARCH has been derived from the consolidated financial statements and related notes of US SEARCH for each of the years in the five-year period ended December 31, 2002 and for the three months ended March 31, 2003 and 2002. This information is only a summary, and you should read it in conjunction with the historical consolidated financial statements of US SEARCH and the related notes attached to this prospectus.

	For the Three Months Ended March 31,						Year Ended December 31,
	2003			2002			2002			2001			2000			1999			1998
Statement of Operations:
Net revenue	$	8,079,000		$	6,663,000		$	30,341,000		$	18,399,000		$	22,363,000		$	19,541,000		$	9,245,000
Cost of services		2,693,000			1,988,000			9,450,000			4,494,000			10,392,000			7,293,000			3,149,000
Gross profit		5,386,000			4,675,000			20,891,000			13,905,000			11,971,000			12,248,000			6,096,000
Operating expenses:
Selling and marketing (1)		2,766,000			2,782,000			11,237,000			10,069,000			25,890,000			22,246,000			7,627,000
Information technology		769,000			938,000			3,296,000			4,397,000			3,777,000			1,074,000			—
General and administrative (2)		3,430,000			3,031,000			14,175,000			10,016,000			12,220,000			7,929,000			3,882,000
Charge for warrants issued to majority stockholder		—			—			—			—			—			—			1,190,000
Total operating expenses		6,965,000			6,751,000			28,708,000			24,482,000			41,887,000			31,249,000			12,699,000
Loss from operations		(1,579,000	)		(2,076,000	)		(7,817,000	)		(10,577,000	)		(29,916,000	)		(19,001,000	)		(6,603,000	)
Interest expense and amortization of debt issue costs (3)		(230,000	)		(935,000	)		(16,212,000	)		(1,522,000	)		(108,000	)		(8,099,000	)		(197,000	)
Interest income		—			—			68,000			167,000			663,000			719,000			—
Other (expense) income, net		—			15,000			(110,000	)		—			—			5,000			13,000
Loss before income taxes		(1,809,000	)		(2,996,000	)		(24,071,000	)		(11,932,000	)		(29,361,000	)		(26,376,000	)		(6,787,000	)
Provision for income taxes		2,000			2,000			5,000			5,000			1,000			1,000			1,000
Net income (loss) attributable to common stockholders		(1,811,000	)		(2,998,000	)		(24,076,000	)		(24,915,000	)		(34,443,000	)		(26,377,000	)		(6,788,000	)
Net loss per-share attributable to common stockholders (4)		(0.02	)		(0.11	)		(0.41	)		(1.38	)		(1.93	)		(1.94	)		(0.71	)
Weighted-average shares outstanding used in per-share calculation (4)		97,021,055			26,610,383			58,711,000			18,054,000			17,836,000			13,612,000			9,521,000

	For the Three Months Ended March 31,						Year Ended December 31,
	2003			2002			2002			2001			2000			1999		1998
Balance Sheet:
Cash and cash equivalents	$	899,000		$	6,721,000		$	2,254,000		$	3,148,000		$	2,831,000		$	17,382,000	$	99,000
Working capital (deficiency)		(6,570,000	)		(9,786,000	)		(4,510,000	)		(9,117,000	)		(3,540,000	)		17,013,000		(7,761,000	)
Total assets		29,783,000			32,924,000			31,299,000			27,735,000			12,015,000			25,650,000		575,000
Long term debt, net of current portion		1,105,000			1,854,000			1,417,000			1,810,000			42,000			37,000		343,000
Total debt (5)		4,379,000			16,364,000			3,208,000			8,263,000			1,094,000			84,000		4,001,000
Redeemable Series A preferred stock		—			—			—			—			6,209,000			—		—
Total stockholders’ equity (deficit)		17,740,000			9,475,000			19,524,000			10,355,000			(3,141,000	)		19,489,000		(7,749,000	)

(1)

Includes non-cash charges relating to options and warrants of $627,000 in 1999 and $1,846,000 in 2000.

(2)

Includes non-cash charges relating to options and warrants of $1,442,000 in 1999.

(3)

Included in interest expense for 1999, 2001, and 2002 is approximately $4.6 million, $455,000 and $11,749,000 respectively, relating to beneficial conversion features, and amortization of debt issue costs of $3,098,000, $720,000, and $4,217,000 for 1999, 2001 and 2002, respectively.

(4)

For a description of the method used to compute basic and diluted net loss per share and weighted average number of shares outstanding, see Note 3 of Notes to the Consolidated Financial Statements of US SEARCH.

(5)

Total debt includes $2.6 million and $1.8 million in Professional Resource Screening acquisition obligations at December 31, 2001 and 2002, respectively, and $3.1 million convertible notes payable in conjunction with the December 2001 financing at December 31, 2001.

US SEARCH MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Explanatory Note: The information below reflects a time period prior to the consummation of the mergers through which First Advantage acquired US SEARCH and the companies formerly comprising the FAST division of The First American Corporation. The mergers were completed on June 5, 2003. US SEARCH and each of the FAST division companies are now wholly-owned subsidiaries of First Advantage, notwithstanding references below that would suggest that the mergers are pending or that US SEARCH and the FAST division companies are not owned by First Advantage.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

US SEARCH provides employment screening services to large businesses and a range of location and risk management services to consumers and small and medium sized business clients including identity verification, individual location, criminal record checks, employment and education verifications, professional reference checks, credit and motor vehicle record checks, drug screening, and pre-employment screening services. US SEARCH is able to deliver location verification and screening services through its proprietary web-based applications and patent pending US SEARCH DARWIN ^{^™}technology. US SEARCH’s services can be accessed through its websites, USSEARCH.com, ussearch.com/business or prsinet.com, or by calling toll free telephone numbers, 1-800-USSEARCH for consumers, 1-877-327-2410 for small and medium businesses or 1-800-232-0247 for large businesses.

US SEARCH’s consumer and small and medium business products provide direct (Internet and telephone) individual locator, and other public record searches to consumers and these services and pre-employment screening services to small and medium-sized businesses. US SEARCH’s business product provides employment screening and risk mitigation services to large businesses and organizations.

Due to the high level of automation, certain of US SEARCH’s services can be conducted instantly online. US SEARCH also offers assisted searches and screening services, both online and through a toll free telephone number.

Large Business Services . US SEARCH provides large businesses, government agencies and other large employers with a variety of employment screening, background check and risk mitigation products and services via an online, web-based system that enables instant ordering and prompt delivery of results. Customers can customize their search and decision parameters online using a “drag-and-drop” browser interface. US SEARCH’s employment screening products include social security number traces, federal and state felony and misdemeanor record searches, employment and education verification, and credit histories. US SEARCH also provides character reference checks and drug screening via third party providers. In addition, US SEARCH offers a Management Services program that provides customers with an outsourced solution to background investigations, which includes analysis of developed investigation data, management of Fair Credit Reporting Act communications, legal compliance, and direct applicant contact.

Consumer-Focused Services. US SEARCH provides consumer clients and small and medium sized businesses with a single, comprehensive access point to a broad range of information to assist them in locating

individuals or to learn more information about people in their lives or with whom they do business. US SEARCH’s consumer clients can obtain public information including addresses, aliases, phone numbers, property ownership, court records, professional license verification, corporate affiliations and death record information. US SEARCH also offers nanny and contractor background check services for consumers and employment screening for small businesses.

Prices for US SEARCH’s non-instant consumer and small and medium business services have ranged from approximately $20 to $395 per search. Prices for “Instant Searches” range from approximately $10 to $15 per search. Prices for large business services range from $3 to $495. The prices for services vary based on the nature and amount of information and whether or not the search is assisted by a search specialist.

Revenue for US SEARCH’s services is recognized when the results are delivered to the client. The terms of sale do not provide for refunds after services have been delivered, however, in instances where the clients indicate that the initial search result was unsuccessful, US SEARCH may perform another search or provide a refund at the customer’s discretion. In addition, where clients desire additional information they can request to broaden the scope of their “Instant Searches” and US SEARCH applies up to a portion of the cost of the client’s “Instant Searches” towards the cost of the more comprehensive search.

US SEARCH’s cost of services consists primarily of payroll and benefits, data acquisition costs, local and long distance telephone charges associated with providing its services, and payment processing costs. US SEARCH’s cost of services is likely to increase with increasing revenue levels. US SEARCH has entered into an agreement with Confi-Check, Inc., a supplier of online public record data. This agreement, which permits US SEARCH representatives and customers access to Confi-check’s information database, will remain in effect following the close of the merger with the FAST division. It expires in October 2003 and is renewable at US SEARCH’s option for up to five additional one-year periods. At March 31, 2003, the non-cancelable payments under this agreement are $483,000 in 2003.

US SEARCH’s operating expenses consist primarily of selling, marketing, general and administrative expenses and information technology costs. US SEARCH expects operating expenses to increase as it attempts to expand its corporate sales force and product lines.

Selling and marketing expenses are a significant portion of US SEARCH’s operating expenses. Internet advertising expenses are the most significant selling and marketing expense. US SEARCH has several cancelable and non-cancelable distribution and marketing agreements with various Internet companies including Yahoo! Inc. The terms of these agreements provide for varying levels of exclusivity and minimum and maximum fees payable based on the number of banners, buttons and text links displayed on affiliate websites. At March 31, 2003, the minimum non-cancelable payments due under these agreements are approximately $2,475,000 for 2003, and $550,000 for 2004.

US SEARCH expects selling and marketing expenses to increase as it attempts to expand its products and market reach in both the consumer-focused and business services groups.

Information technology expenses consist primarily of the compensation and benefits for employees and consultants involved in development, network administration, planning and maintenance of infrastructure. Certain costs associated with the development of software for internal use are capitalized. Information technology costs are expected to increase with the continuing development of proprietary technology.

General and administrative expenses consist primarily of compensation and related costs for administrative personnel, our occupancy costs and other overhead costs. US SEARCH expects general and administrative costs to remain flat or decrease as it continues to manage the size and growth of its organization.

Interest expense, net of interest income, consists of interest on outstanding short term and long-term debt, and convertible notes payable. Interest expense also includes non-cash charges resulting from beneficial conversion features on US SEARCH’s convertible notes payable, and the amortization of discounts and issuance costs on US SEARCH’s convertible notes payable, vendor notes payable, and bank credit facility. Upon the conversion of all remaining convertible notes payable into US SEARCH’s common stock, US SEARCH recognized all remaining beneficial conversion feature charges and wrote off all remaining discounts and issuance cost related to the convertible notes payable. Consequently, US SEARCH expects interest expense to decrease.

Results of Operations

Comparison of the Three Months Ended March 31, 2003 to the Three Months Ended March 31, 2002

Net Revenues. Net revenues increased from approximately $6.7 million for the three months ended March 31, 2002 to approximately $8.1 million for the three months ended March 31, 2003, representing a 21% increase. Approximately $500,000 of the increase is attributable to our large business services division that added new clients. The remaining $900,000 increase was due to growth in the Company’s consumer-focused business. Through a combination of establishing new channel partnerships, strengthening existing channel partnership relationships, and implementing enhanced search technology, the Company was able to increase internet traffic to its website and improve customer conversion rates for the consumer-focused business.

Gross Profit. Gross profit increased from approximately $4.7 million for the three months ended March 31, 2002, to approximately $5.4 million for the three months ended March 31, 2003, representing a 15% increase. Gross profit as a percentage of net revenues was approximately 67% and 70% for the three month periods ended March 31, 2003 and 2002, respectively. The decrease in gross margin reflects the change in product mix at our large business services division causing an increase in direct labor to fulfill the product sales. Increased automation in our consumer-focused business, which resulted in a reduction in direct labor expense for the consumer-focused business, also contributed to an increase in gross profit, which offset some of the decrease in gross profit from our large business services division.

Selling and Marketing Expenses. Selling and marketing expenses were $2.8 million for the three-month period ended March 31, 2003 as compared to $2.8 million for the 2002 period. Although costs remained unchanged, selling and marketing expenses were 34% of sales for the three months ended March 31, 2003 compared to 42% of sales for the three months ended March 31, 2002. The decrease in the ratio of selling and marketing expenses to sales is a result of the Company’s efforts to reduce customer acquisition costs and to implement more efficient means of marketing by taking steps such as developing better channel partnerships and more efficient monitoring of channel partner performance.

General and Administrative Expenses. General and administrative expenses for the three months ended March 31, 2003 increased by $399,000 compared to the same period in 2002. The change is primarily the result of a $370,000 increase due to merger related costs, a $38,000 increase in accounting fees, a $28,000 increase in bank fees relating to the new credit facility and a $91,000 increase in insurance, partially offset by a $88,000 reduction in legal fees. Additionally, there was a net $40,000 reduction in credit card dispute chargebacks and related chargeback fees. To achieve the reduction in chargebacks, the Company introduced several new credit card authentication procedures to verify credit card transactions.

Information Technology Expenditures. Information technology expenditures decreased by $169,000 for the three-month period ended March 31, 2003 as compared to the 2002 period. The change is the result of a reduction in payroll costs due to a reduction in headcount, and a decrease in consulting costs due to implementation of certain of the Company’s internally developed software and re-negotiation of software maintenance contracts.

Interest Expense, Net. Interest expense, net of interest income, was $230,000 for the three months ended March 31, 2003 as compared to $935,000 for the same period in 2001. The reduction is due to the conversion, in July 2002, of the 8% Convertible Promissory Notes. Included in interest expense for the 2002 period are non-cash interest charges of $611,000 related to the amortization of discounts on the Company’s convertible notes payable. Also included is $275,000 related to the amortization of debt issuance costs incurred in connection with the Company’s bank credit facility. Included in interest expense for the 2003 period are non-cash interest charges of $171,000 primarily related to the amortization of debt issuance costs incurred in connection with the Company’s bank credit facility.

Net Loss. Net loss decreased $1.2 million from $3.0 million for the three months ended March 31, 2002 to $1.8 million for the three months ended March 31, 2003. The decrease in net loss was primarily attributable to an increase in gross profit and a reduction in interest expense described above.

Liquidity and Capital Resources

As of March 31, 2003, cash and cash equivalents totaled $899,000 (excluding $475,000 of restricted cash pledged in part as collateral in connection with US SEARCH’s credit facility with Comerica) as compared with $2.3 million as of December 31, 2002.

Cash used in operations decreased to $1.9 million for the three months ended March 31, 2003 as compared to $3.9 million for the three months ended March 31, 2002. This decrease is primarily attributable to reduced losses from operations, net of non-cash interest expense.

Cash used in investing activities remained constant at approximately $700,000 for both the three months ended March 31, 2003 and March 31, 2002.

Cash provided by financing activities was approximately $1.2 million for the three months ended March 31, 2003 compared to the $8.2 million for the three months ended March 31, 2001. The cash provided in 2003 is primarily attributable to $1.4 million in cash proceeds from a note payable to First American, offset by $150,000 repayment of PRSI acquisition obligation, repayment of $51,000 of bank debt, $100,000 decrease in restricted cash, $45,000 repayment of notes payable and payments of $27,000 relating to capital lease obligations. The cash provided in 2002 is primarily attributable to $10.2 million in cash proceeds from issuance of our convertible notes payable, offset by $490,000 repayment of PRSI acquisition obligation, repayment of $234,000 of bank debt, $1.2 million increase in restricted cash and $81,000 of capital lease obligations.

On March 27, 2002 the Company’s Loan Agreement with the Bank was renewed through March 26, 2003 by Waiver and Amendment Number One. On August 7, 2002 the Loan Agreement was amended to provide a total credit extension of up to $1 million by Waiver and Amendment Number Two. The Loan Agreement was amended again on January 22, 2003 to retroactively reduce the restricted cash requirement to $550,000 at December 31, 2002 by Waiver and Amendment Number Three. Borrowings under this line bear interest at prime plus 2.5%, (6.75% at December 31, 2002). At various times throughout the year the company was in violation of certain of its loan covenants related to minimum EBITDA and Debt/Tangible net worth, all violations of which the banked waived.

On March 18, 2003, the loan agreement was renewed and expanded to a $2.5 million Revolving Loan Facility. Availability under the Facility will be limited to an advance formula of up to 100% on the first $1.5 million of availability and 85% of eligible accounts receivable for amounts advanced in excess of $1.5 million up to $2.5 million. The Facility matures on April 30, 2004. The Facility is collateralized by all of the personal property of US SEARCH, tangible and intangible. Security will include a $450,000 pledged certificate of deposit, considered restricted cash. The borrowing rate is prime plus 1.50% on the first $1.5 million and prime plus 2.50% on amounts above $1.5 million up to $2.5 million. The bank will receive a 7-year warrant to purchase common stock at an exercise price per share equal to the closing price of such common stock on the date of consummation of the merger such that the product of such number of shares multiplied by such exercise price equals $25,000. The Company will have to meet certain operating performance, minimum EBITDA and Debt/Tangible Net Worth covenants on a monthly basis.

In December 2001 and in the first quarter of 2002, US SEARCH received $13.9 million net proceeds from the issuance of convertible notes payable, which were subsequently converted into 27,864,051 shares of common stock of the Company during 2002.

On January 15, 2003, as contemplated in the merger agreement with First American, First American loaned the Company $1.4 million pursuant to a subordinated secured promissory note. The note matures on June 30, 2003 and bears interest at a rate equal to the lesser of 10% or the prime rate plus 4.75%. If an uncured event of default occurs under the note, all principal and accrued interest will become immediately due and payable and the interest rate will increase to the lesser of 10% or prime plus 6.75%. If the merger with First Advantage is not completed by June 30, 2003 or an event of default occurs, there is no assurance that the Company will have sufficient liquidity to repay the loan to First American.

Contractual Obligations and Commercial Commitments. The following table summarizes all significant contractual payment obligations as of March 31, 2003, by payment due date:

	Payments by Period
Contractual Obligation	Total		2003		2004-2005
	($ Thousands)
Bank debt	$	1,111	$	1,091	$	20
Advertising commitments(e)		3,025		2,475		550
Capital lease obligations(d)		142		113		29
Operating lease obligations(c)		3,097		1,173		1,924
Minimum purchase commitments(b)		483		483		—
PRSI payment obligations(a)		1,920		400		1,520
Total	$	9,778	$	5,735	$	4,043

(a)

Includes payment obligations of $1,520,000, payable in equal monthly installments of $127,000 commencing January 2004. These payments may be accelerated commencing July 2002 based on the profitability and cash flows of Professional Resource Screening.

(b)

Includes payment obligations of $483,000 to Conficheck, one of our data suppliers, payable at a rate of $69,000 per month until October 22, 2003.

(c)

Includes real property leases for payments for headquarters offices of US SEARCH and Professional Resource Screening.

(d)

Includes various equipment leases.

(e)

Includes $275,000 minimum monthly payment obligation to Yahoo! until February 29, 2004.

Selected Quarterly Financial Data

The following table sets forth certain unaudited financial data for the eight quarters in the period ended December 31, 2002 and for the three months ended March 31, 2003. This data has been derived from unaudited financial statements that, in the opinion of US SEARCH’s management, include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the information when read in conjunction with US SEARCH’s annual audited financial statements and the notes thereto. Certain reclassifications have been made to prior quarters to conform with current quarter presentations. The operating results for any quarter are not necessarily indicative of the results for any future period.

	Quarter Ended
	March 31, 2002			June 30, 2002			September 30, 2002			December 31, 2002			March 31, 2003
	(in thousands except per share data)
Net Sales	$	6,663		$	7,526		$	8,427		$	7,725		$	8,079
Gross Profit		4,675			5,312			5,916			4,988			5,386
Net Loss		(2,998	)		(3,714	)		(14,572	)		(2,792	)		(1,811	)
Loss per share basic and diluted		(0.11	)		(0.14	)		(0.18	)		(0.03	)		(0.02	)

	Quarter Ended
	March 31, 2002			June 30, 2002			September 30, 2002			December 31, 2002
	(in thousands except per share data)
Net Sales	$	4,941		$	5,005		$	4,517		$	3,936
Gross Profit		3,517			3,952			3,478			2,958
Net Loss		(2,790	)		(2,758	)		(2,747	)		(3,642	)

Net Loss attributable to common stockholders		(3,029	)		(15,497	)		(2,747	)		(3,642	)
Loss per share basic and diluted		(0.17	)		(0.86	)		(0.15	)		(0.20	)

Quantitative and Qualitative Disclosures About Market Risk

US SEARCH considered the provision of Financial Reporting Release No. 48 “Disclosure of Accounting Policies for Derivative Financial Instruments and Derivative Commodity Instruments, and Disclosure of Quantitative and Qualitative Information about Market Risk Inherent In Derivative Financial Instruments, Other Financial Instruments and Derivative Commodity Instruments.” US SEARCH had no holdings of derivative financial instruments at December 31, 2002 and its total liabilities as of December 31, 2002 consist primarily of notes payable and accounts payable that have fixed interest rates and were not subject to any significant market risk.

SELECTED HISTORICAL FINANCIAL INFORMATION OF THE FAST DIVISION

The selected financial data of the FAST division has been derived from the audited combined financial statements and accompanying notes of the FAST division for the four years ended December 31, 2002, the unaudited combined financial statements of the FAST division for the year ended December 31, 1998 and the unaudited combined financial statements for the three months ended March 31, 2003 and March 31, 2002. This information is only a summary and should be read in conjunction with, and is qualified in its entirety by reference to, the combined financial statements and accompanying notes attached to this prospectus.

	For the Three Months Ended March 31,						Year Ended December 31,
	2003			2002			2002			2001			2000			1999			1998
Statement of Operations:
Total revenue	$	31,540,656		$	22,647,238		$	100,924,598		$	49,167,057		$	38,582,074		$	30,372,638		$	23,196,975
Cost of revenue		13,818,968			10,287,766			45,418,967			14,615,322			11,128,306			8,412,157			6,323,396

Gross margin		17,721,688			12,359,472			55,505,631			34,551,735			27,453,768			21,960,481			16,873,579
Selling, general, and administrative expenses		17,019,184			11,120,361			51,004,721			35,007,605			26,856,220			22,293,539			14,406,556

Income (loss) from operations		702,504			1,239,111			4,500,910			(455,870	))		597,548			(333,058	)		2,467,023

Interest (expense) income:
Interest expense		(18,809	)		(16,250	)		(228,559	)		(241,686	)		(312,991	)		(262,154	)		(37,166	)
Interest income		10,726			24,339			59,102			59,349			32,296			21,333			4,222

Total interest (expense) income, net		(8,083	)		8,089			(169,457	)		(182,337	)		(280,695	)		(240,821	)		(32,944	)

Income (loss) before provision (benefit) for income tax		694,421			1,247,200			4,331,453			(638,207	)		316,853			(573,879	)		2,434,079
Provision (benefit) for income tax		298,601			469,109			1,629,142			(58,898	)		266,338			(237,567	)		481,602

Net income (loss)	$	395,820		$	778,091		$	2,702,311			(579,309	)		50,515			(336,312	)		1,952,477

Balance Sheet:
Total assets	$	165,337,769		$	107,056,647		$	164,006,580		$	62,283,725		$	26,628,269		$	15,591,881		$	5,431,869
Long-term debt, net of current portion	$	521,141		$	1,031,765		$	650,906		$	1,158,713		$	2,260,899		$	1,410,425		$	355,406
Stockholders’ equity	$	146,952,574		$	94,099,375		$	145,902,096		$	53,075,105		$	18,491,766		$	12,390,154		$	4,372,076

FAST DIVISION MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Explanatory Note: The information below reflects a time period prior to the consummation of the mergers through which First Advantage acquired US SEARCH and the companies formerly comprising the FAST division of The First American Corporation. The mergers were completed on June 5, 2003. US SEARCH and each of the FAST division companies are now wholly-owned subsidiaries of First Advantage, notwithstanding references below that would suggest that the mergers are pending or that US SEARCH and the FAST division companies are not owned by First Advantage.

The following discussion of results of operations and financial condition should be read in conjunction with the FAST division’s combined financial statements and the related notes attached to this prospectus.

Overview

The FAST division provides business information and related products and services. The FAST division’s principal businesses include tenant screening, employee background checking, occupational health services and motor vehicle reports.

The FAST division earns revenue in the form of fees from the reports generated through its database of information and by searches performed. The FAST division generally enters into agreements with customers under which they pay a fixed fee per report generated. The FAST division recognizes this revenue when reports have been prepared and delivered.

The FAST division’s expenses consist primarily of compensation and benefits costs for employees, data acquisition costs, occupancy and related costs, selling, general and administrative expenses associated with operating its business, income taxes and debt service obligations. The FAST division’s expenses are likely to increase with increasing revenue levels.

Critical Accounting Policies and Estimates

The FAST division’s discussion and analysis of financial condition and results of operations are based upon its combined financial statements, which have been prepared in accordance with generally accepted accounting principles. The FAST division believes the following are the more critical accounting policies that impact its financial statements, some of which are based on management’s best estimates available at the time of preparation. Other accounting policies also have a significant effect on the FAST division’s combined financial statements, and some of these policies also require the use of estimates and assumptions. Although the FAST division believes that its estimates and assumptions are reasonable, actual results may differ.

Revenue Recognition

Revenue is recognized at the time of delivery of the reports as the FAST division has no ongoing obligation after delivery.

Allowance for Uncollectible Receivables

The allowance for all probable uncollectible receivables is based on a combination of historical data, cash payment trends, specific customer issues, write-off trends, general economic conditions and other factors. These factors are continuously monitored by management to arrive at the estimate for the amount of accounts receivable that may be ultimately uncollectible. In circumstances where the FAST division is aware of a specific customer’s inability to meet its financial obligations, the FAST division records a specific allowance for bad debts against amounts due to reduce the net recognized receivable to the amount it reasonably believes will be collected. This analysis requires making significant estimates, and changes in facts and circumstances could result in material changes in the allowance for uncollectible receivables.

Capitalized Software Development Costs

The FAST division capitalizes costs associated with developing software for internal use, which costs primarily include salaries of developers. Direct costs incurred in the development of software are capitalized once

the preliminary project stage is completed, management has committed to funding the project, and completion and use of the software for its intended purpose are probable. The FAST division ceases capitalization of development costs once the software has been substantially completed and is ready for its intended use.

Database Development Costs

Database development costs represents expenditures associated with the FAST division’s databases of information for customer usage. The costs are capitalized from the time technological feasibility is established until the information is ready for use.

Impairment of Intangible and Long-Lived Assets

Through December 31, 2002, the FAST division evaluated goodwill and intangibles for impairment based on undiscounted projected future cash flows and determined that no adjustment was necessary. However, if future actual results do not meet expectations, the FAST division may be required to record an impairment charge, the amount of which could be material to results of operations.

In August 2001, the FASB issued SFAS 144 “Accounting for the Impairment or Disposal of Long-Lived Assets”. SFAS 144 establishes a single accounting model for the impairment or disposal of long-lived assets, including discontinuance of operations. SFAS 144 superseded Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets for Long-Lived Assets to Be Disposed of and APB Opinion No. 30, Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary Unusual and Infrequently Occurring Events and Transactions. The provisions of SFAS 144 are effective in fiscal years beginning after December 15, 2001, with early adoption permitted and, in general, are to be applied prospectively.

Purchase Accounting

In June 2001, the Financial Accounting Standards Board, or the FASB, issued SFAS No. 141, “Business Combinations” and SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 141 requires business combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting, and broadens the criteria for recording intangible assets separate from goodwill. Recorded goodwill and intangibles will be evaluated against these new criteria and may result in certain intangibles being subsumed into goodwill, or alternatively, amounts initially recorded as goodwill may be separately identified and recognized apart from goodwill. SFAS No. 142 requires the use of a nonamortization approach to account for purchased goodwill and certain intangibles. Under a nonamortization approach, goodwill and certain intangibles will not be amortized into results of operations, but instead would be reviewed for impairment and written down and charged to results of operations only in the periods in which the recorded value of goodwill and certain intangibles is more than its fair value. The FAST division adopted the provisions of each statement applying to goodwill and intangible assets acquired prior to June 30, 2001 on January 1, 2002. These new requirements impacted net income by an amount equal to the discontinued goodwill amortization. Future periods may also be impacted by goodwill impairment charges and adjusted for any differences between the old and new rules for defining intangible assets on future business combinations.

In June 2001, the FASB issued SFAS No. 141 Business Combinations and SFAS No. 142 Goodwill and Other Intangible Assets. SFAS No. 141 requires business combinations initiated after June 30, 2001, to be accounted for using the purchase method of accounting, and broadens the criteria for recording intangible assets separate from goodwill. Adoption of these standards did not have a significant impact on the operations or cash flows of the FAST division. Intangible assets consist mainly of non-compete agreements, trademarks and customer lists.

New Accounting Pronouncements

In July 2001, the FASB issued SFAS 143 Accounting for Asset Retirement Obligations, which requires that companies recognize a liability for retirement obligations of long lived assets in the period the liability occurs. This pronouncement is effective for fiscal years beginning after June 15, 2002. The FAST division does not anticipate any significant impact on financial results from adoption of this standard.

In June 2002, the FASB issued SFAS 146 Accounting for Costs Associated with Exit or Disposal Activities. This pronouncement addresses financial accounting and reporting for costs associated with exit or disposal activities

not covered under SFAS 144 and also nullifies EITF 94-3. This pronouncement is effective for activities initiated after December 31, 2002. We do not anticipate any significant impact on financial results from adoption of this standard.

Results of Operations

Through several strategic acquisitions during 2002 and 2001, the FAST division was further able to expand service capabilities and geographic coverage. The FAST division intends to continue providing these services and to expand upon existing customer relationships by providing supplementary services as well as increasing the operations in existing markets.

The following table sets forth, for the periods indicated, the percentages that certain items of income and expenses bear to revenue for such periods. Interim results are not necessarily indicative of results for a full year:

	For the three months ended March 31,				For the year ended December 31,
	2003		2002		2002		2001		2000
Service revenues	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Cost of service revenues	43.8	%	45.4	%	45.0	%	29.7	%	28.8	%

Gross margin	56.2	%	54.6	%	55.0	%	70.3	%	71.2	%
Selling, general, and administrative expenses	54.0	%	49.1	%	50.5	%	71.2	%	69.6	%

Income (loss) from operations	2.2	%	5.5	%	4.5	%	(0.9	)%	1.5	%

Other (expense) income:
Interest expense	(0.1	)%	(0.1	)%	(0.2	)%	(0.5	)%	(0.8	)%
Interest income	0.0	%	0.1	%	0.1	%	0.1	%	0.1	%

Total interest expense, net	0.0	%	0.0	%	(0.2	)%	(0.4	)%	(0.7	)%

Income (loss) before provision (benefit) for income tax	2.2	%	5.5	%	4.3	%	(1.3	)%	0.8	%
Provision (benefit) for income tax	.9	%	2.1	%	1.6	%	(0.1	)%	0.7	%

Net income (loss)	1.3	%	3.4	%	2.7	%	(1.2	)%	0.1	%

Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002

Service Revenues

Service revenues for the three months ended March 31, 2003 increased $8.9 million or 39.3% to $31.5 million from $22.6 million during the same period in 2002. The increase is primarily due to strategic acquisitions made in late 2002. The acquisitions accounted for approximately $6.8 million of total service revenues during the quarter ended March 31, 2003. Service revenues at existing operations increased approximately $2.1 million due to additional volumes of business in response to expanded marketing efforts. The FAST division continues to see an expansion of operations as businesses continue to expand their use of employment and residential screening.

Cost of Revenues

Cost of revenues for the three months ended March 31, 2003 increased $3.5 million or 34.3% to $13.8 million from $10.3 million during the same period in 2002. The increase is due to the effect of acquisitions made in late 2002. Cost of revenues as a percentage of service revenues decreased from 45.4% to 43.8%.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended March 31, 2003 increased $5.9 million or 53.0% to $17.0 million from $11.1 million during the same period in 2002. Approximately $3.2 million of this increase is due to additional personnel, facilities and operating expenses associated with the acquisitions noted above. The remaining increase was due to additional personnel and facilities expense in relation to the expanded sales efforts at existing operations.

Income Taxes

Provision for income taxes for the three months ended March 31, 2003 was $299,000 compared to a provision of $469,000 during the same period in 2002. This change is due to the changes in income from operations related to the operating factors discussed above.

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

Service Revenues

Service revenues for the year ended December 31, 2002 increased $51.8 million or 105.3% to $100.9 million from $49.2 million during the same period in 2001. The increase is primarily due to strategic acquisitions made during 2002 and in late 2001. The acquisitions accounted for approximately $47.0 million of total service revenues during the year ended December 31, 2002. Service revenues at existing operations increased approximately $4.8 million due to additional volumes of business in response to expanded marketing efforts. The FAST division continues to see an expansion of operations as businesses continue to expand their use of employment and residential screening.

Cost of Revenues

Cost of revenues for the year ended December 31, 2002 increased $30.8 million or 210.8% to $45.4 million from $14.6 million during the same period in 2001. The increase is due to the effect of acquisitions made during the beginning of 2002 and in late 2001. Cost of revenues as a percentage of service revenues increased from 29.7% to 45.0%. This increase is primarily due to the acquisition of American Driving Records, Inc. in January 2002 and the inclusion in cost of revenue of fees charged by states for motor vehicle records.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for year ended December 31, 2002 increased $16.0 million or 45.7% to $51.0 million from $35.0 million during the same period in 2001. Approximately $13.2 million of this increase is due to additional personnel, facilities and operating expenses associated with the acquisitions noted above. The remaining increase was due to additional personnel and facilities expense in relation to the expanded sales efforts at existing operations.

Income Taxes

Provision for income taxes for the year ended December 31, 2002 was $1.6 million compared to a benefit of $59,000 during the same period in 2001. This change is due to the changes in income from operations related to the operating factors discussed above.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

Service Revenues

Service revenues for the year ended December 31, 2001 increased $10.6 million or 27.4% to $49.2 million from $38.6 million during the same period in 2000. The increase was primarily due to a strategic acquisition made during 2001. The acquisition accounted for approximately $7.5 million of total service revenues during the year ended December 31, 2001. Service revenues at existing operations increased approximately $2.8 million due to additional volumes of business in response to expanded marketing efforts. The FAST division continued to see an expansion of operations as businesses continued to expand their use of employment and residential screening.

Cost of Revenues

Cost of revenues for the year ended December 31, 2001 increased $3.5 million or 31.3% to $14.6 million from $11.1 million during the same period in 2000. Cost of revenues as a percentage of service revenues increased from 28.8% to 29.7%. The increase was due to a strategic acquisition made in 2001.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for year ended December 31, 2001 increased $8.2 million or 30.4% to $35.0 million from $26.9 million during the same period in 2000. Approximately $3.2 million of this increase was due to additional personnel and facilities associated with the acquisition noted above. The remaining increase was due to additional personnel and facilities expense in relation to the expanded sales efforts at existing operations.

Income Taxes

Benefit for income taxes for the year ended December 31, 2001 was $59,000 compared to a provision of $266,000 during the same period in 2000. This change was due to the changes in income from operations related to the operating factors discussed above.

Liquidity and Capital Resources

The FAST division’s primary source of liquidity is cash flow from operations and contributions from its parent, First American. As of March 31, 2003, cash and cash equivalents have increased to $6.7 million from $6.5 million as of December 31, 2002.

Cash provided by operations was $1.0 million for the three months ended March 31, 2003 as compared to $3.8 million for the same period in 2002. Cash provided by operations was $10.2 million, $2.5 million and $1.6 million for the years ended December 31, 2002, 2001 and 2000, respectively.

Cash used in investing activities was $1.2 million for the three months ended March 31, 2003 as compared to $3.3 million for the same period in 2002. Cash used in investing activities was $9.4 million, $7.1 million and $4.7 million for the years ended December 31, 2002, 2001 and 2000, respectively. Cash was used primarily to purchase computer hardware, software and database development costs.

Cash provided by financing activities was $427,000 for the three months ended March 31, 2003 as compared to $3.5 million for the same period in 2002. Cash provided by financing activities was $4.5 million, $3.0 million and $4.0 million for the years ended December 31, 2002, 2001 and 2000, respectively. The cash provided is primarily attributable to the contributions from First American. Cash used in financing operations is the repayment of term notes.

First American contributed cash of approximately $655,000 during the three months ended March 31, 2003 and $3.5 million for the same period in 2002. Contributions from First American were $5.7 million, $4.8 million and $3.0 million during the years ended December 31, 2002, 2001 and 2000, respectively. In accordance with the merger agreement, First American is expected to provide an additional cash contribution such that as of the closing of the mergers, First Advantage will have cash of $15.0 million less merger related costs such as legal, accounting and financial advisor fees. Although First American has provided contributions in the past to support acquisitions and operations of First Advantage, there can be no assurance of future contributions. Pursuant to a standstill agreement to be entered into between First American and First Advantage, a majority of disinterested directors of First Advantage must approve of all transactions between First American or its affiliates and First Advantage, except for loans of up to $1.0 million. The services agreement does not prevent First American and First Advantage from agreeing to a loan by First American to First Advantage in excess of $1.0 million so long as it is approved by a committee of disinterested directors of First Advantage.

During fiscal 1999, the FAST division made a term note in favor of First American Real Estate Solutions LLC, an 80% owned subsidiary of First American, for approximately $3.0 million as consideration for a tenant screening business then owned by that company. This note calls for annual principal payments of $750,000 and quarterly interest payments with a rate equal to the prime lending rate. Approximately $110,870 is outstanding at December 31, 2002 on this note. As part of the acquisition of Factual Business Information in 2000, a term note was

issued to the former owner of Factual Business Information for approximately $1.5 million. Monthly payments on this note are approximately $30,415, which includes interest at 8%. Approximately $898,273 is outstanding at December 31, 2002 on this note. The FAST division has entered into various capital leases which have varying payments and interest rates. Approximately $181,170 is outstanding at December 31, 2002 relating to capital leases. In accordance with the merger agreement, as of the closing date of the mergers, the FAST division will have no acquisition-related debt and no debt owed to First American or its affiliates, except for amounts owed in respect of certain services performed and employee related costs incurred.

The FAST division also leases certain office facilities, automobiles and equipment under operating leases, which, for the most part, are renewable. The majority of these leases also provide that the FAST division will pay insurance and taxes.

First Advantage and First American have entered into a services agreement pursuant to which First American will provide certain financial, administrative and managerial support services to First Advantage. Human resources systems and payroll systems and support, network services and financial systems will be provided at an annual cost of $150,000, $100,000 and $50,000, respectively. Legal and tax support, human resources support, investor relations and corporate communications support, accounting and financial management support, strategic planning and general management support will be provided at an aggregate annual cost of $600,000 plus reasonable out of pocket expenses. In addition, certain other services including pension and 401(k) expenses, corporate and medical insurance, personal property leasing and company car programs will be provided at actual cost. Pursuant to the services agreement, First American may make one or more loans to First Advantage on mutually agreeable terms without first obtaining the approval of a majority of disinterested directors of First Advantage; provided that the interest rate on the loans may not exceed prime plus 2.75% and the aggregate amount of the loans may not exceed $1.0 million. The services agreement will commence on the effective date of the mergers and continue for one year. The services agreement will continue for successive six-month periods thereafter unless either First Advantage or First American advises the other in writing, no later than 30 days before the expiration of a six-month period, that the services agreement will not be extended.

In connection with the merger agreement, on January 15, 2003, First American loaned US SEARCH $1.4 million pursuant to a subordinated secured promissory note. The note bears interest at a rate equal to the lesser of 10% and the prime rate plus 4.75%. The obligations evidenced by the note are secured by all real and personal property of US SEARCH. If an event of default occurs, the loan and related interest will become immediately due and payable. In accordance with the merger agreement, at the closing date, First Advantage will have a cash balance of $15.0 million less merger related costs. In addition, at the closing of the mergers, the principal and related interest balances outstanding on this loan will be deducted from the additional cash infusion to be provided by First American.

The FAST division has historically sought to acquire other businesses as part of its program of strategic growth. The FAST division continues to evaluate acquisitions in order to capitalize on the consolidation occurring in the industry and expects to fund such acquisitions from available sources of liquidity.

While uncertainties within the FAST division’s industry exist, management is not aware of any trends or events likely to have a material adverse effect on liquidity or the accompanying financial statements. The FAST division believes that based on current levels of operations and anticipated growth, the FAST division’s cash flow from operations, together with available sources of liquidity, will be sufficient to fund operations, anticipated capital expenditures, make required payments of principal and interest on debt, and satisfy other long-term contractual commitments. The following is a schedule of long-term contractual commitments (as of December 31, 2002) over the periods in which they are expected to be paid.

	2003		2004		2005		2006		2007		Thereafter		Total
Operating leases	$	2,814,951	$	1,847,416	$	1,467,544	$	1,029,671	$	850,179	$	136,321	$	8,146,082
Long-term indebtedness		539,406		370,272		278,151		2,483		—		—		1,190,312

Total	$	3,354,357	$	2,217,688	$	1,745,695	$	1,032,154	$	850,179	$	136,321	$	9,336,394

Quantitative and Qualitative Disclosures about Market Risk

The FAST division considered the provision of Financial Reporting Release No. 48 “Disclosure of Accounting Policies for Derivative Financial Instruments and Derivative Commodity Instruments, and Disclosure of Quantitative and Qualitative Information about Market Risk Inherent In Derivative Financial Instruments, Other Financial Instruments and Derivative Commodity Instruments.” The FAST division had no holdings of derivative financial instruments at December 31, 2002 and its total liabilities as of December 31, 2002 consist primarily of notes payable and accounts payable that have fixed interest rates and were not subject to any significant risk.

The FAST division’s fixed rate debt consists primarily of unsecured term notes, and its variable rate debt relates to borrowings with related parties. A 1% increase in interest rates due to increased rates nationwide would not result in a significant amount of additional interest payments by the FAST division.

Selected Quarterly Financial Data

The following table sets forth certain unaudited combined financial data of the FAST division for the nine quarters in the period ended March 31, 2003. This data has been derived from unaudited combined financial statements of the FAST division that, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the information when read in conjunction with the FAST division’s audited combined financial statements and the notes thereto. The operating results for any quarter are not necessarily indicative of the results for any future period.

	Quarter Ended
	March 31, 2002		June 30, 2002		September 30, 2002		December 31, 2002			March 31, 2003
	(in thousands except per share data)
Net Sales	$	22,647,238	$	24,714,663	$	26,913,747	$	26,648,950		$	31,540,656
Gross Profit	$	12,359,472	$	14,423,944	$	14,479,959	$	14,242,256		$	17,721,688
Net Income (Loss)	$	778,091	$	1,495,101	$	976,096	$	(546,977	)	$	395,820

	Quarter Ended
	March 31, 2001			June 30, 2001		September 30, 2001		December 31, 2001
Net Sales	$	10,260,596		$	11,042,194	$	14,352,495	$	13,511,772
Gross Profit	$	7,409,318		$	8,126,100	$	9,962,998	$	9,053,319
Net Income (Loss)	$	(256,079	)	$	169,996	$	680,869	$	(1,174,095	)

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

Explanatory Note: The financial statements below and the accompanying notes were prepared prior to, and reflect time periods prior to, the consummation of the mergers through which First Advantage acquired US SEARCH and the companies formerly comprising the FAST division of The First American Corporation. The mergers were completed on June 5, 2003. US SEARCH and each of the FAST division companies are now wholly-owned subsidiaries of First Advantage, notwithstanding references below that would suggest that the mergers are pending or that US SEARCH and the FAST division companies are not yet owned by First Advantage.

The following unaudited pro forma combined financial statements have been prepared to give effect to the proposed merger of the FAST division and US SEARCH using the purchase method of accounting and the assumptions and adjustments described in the accompanying notes to unaudited pro forma combined financial statements.

The table that follows presents unaudited pro forma financial data for the FAST division and US SEARCH for the three months ended March 31, 2003 and for the year ended December 31, 2002 as if the mergers had been completed on January 1, 2002 for income statement purposes and on March 31, 2003 for balance sheet purposes. The pro forma information is based upon the historical combined financial statements of the FAST division, the historical consolidated financial statements of US SEARCH and the assumptions, estimates and adjustments described in the notes to the unaudited pro forma combined financial information. The assumptions, estimates and adjustments are preliminary and have been made solely for purposes of developing such pro forma information.

The unaudited pro forma combined financial statements are presented for illustrative purposes only and are not necessarily indicative of the consolidated financial position or consolidated results of operations of First Advantage that would have been reported had the mergers occurred on the dates indicated, nor do they represent a forecast of the consolidated financial position of First Advantage at any future date or the consolidated results of operations for any future period. Furthermore, no effect has been given in the unaudited pro forma combined statements of operations for synergistic benefits or cost savings that may be realized through the combination of the FAST division and US SEARCH or costs that may be incurred in integrating their operations. The FAST division and US SEARCH currently are developing plans to integrate the operations of the companies, which will involve costs including, among others, severance and settlement of operating and capital commitments, which may be material. The unaudited pro forma combined financial information should be read in conjunction with the historical financial statements and related notes and management’s discussion and analysis of financial condition and results of operations of the FAST division and US SEARCH included in this prospectus.

FIRST ADVANTAGE CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

At March 31, 2003

	FAST Division Historical		US SEARCH Historical			Pro Forma Adjustments			First Advantage Pro Forma
Assets
Current assets:
Cash and cash equivalents	$	6,681,152	$	1,374,000		$	221,848	(A)	$	8,277,000
Trade accounts receivable		15,971,654		1,944,000			—			17,915,654
Prepaid expenses and other current assets		1,254,206		1,045,000			—			2,299,206

Total current assets		23,907,012		4,363,000			221,848			28,491,860
Property and equipment, net		11,944,993		9,070,000			2,326,000	(B)		23,340,993
Goodwill, net		112,448,491		13,529,000			40,041,712	(B)		166,019,203
Other intangible assets, net		10,356,541		2,572,000			1,228,000	(B)		14,156,541
Database development costs, net		6,509,161		—			—			6,509,161
Other assets		171,571		249,000			—			420,571

Total assets	$	165,337,769	$	29,783,000		$	43,817,560		$	238,938,329

Liabilities and Stockholder’s Equity
Current liabilities:
Accounts payable	$	2,407,377	$	5,307,000			—		$	7,714,377
Accrued liabilities		8,573,519		2,352,000			—			10,925,519
Income taxes payable		1,634,340		—			—			1,634,340
Current portion of long-term debt and capital leases		441,991		3,274,000			(423,541	)(C)		3,292,450

Total current liabilities		13,057,227		10,933,000			(423,541	)		23,566,686
Long-term debt and capital leases, net of current portion		521,141		1,105,000			(511,834	)(C)		1,114,307
Deferred taxes		4,429,254		—			—			4,429,254
Other liabilities		377,573		5,000			1,545,000	(D)		1,927,573

Total liabilities		18,385,195		12,043,000			609,625			31,037,820

Commitments and contingencies

Stockholder’s equity:
Common stock		—		97,000			(77,195	)(E)		19,805
Additional paid in capital		142,144,701		118,048,000			(57,119,870	)(E)		203,072,831
Retained earnings		4,807,873		(100,405,000	)		100,405,000	(E)		4,807,873

Total stockholder’s equity		146,952,574		17,740,000			43,207,935			207,900,509

Total liabilities and stockholder’s equity	$	165,337,769	$	29,783,000		$	43,817,560		$	238,938,329

See the accompanying notes to the unaudited pro forma combined financial information.

FIRST ADVANTAGE CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

Year Ended December 31, 2002

	FAST Division Historical			Past Acquisitions(F)			FAST Division As Adjusted			US SEARCH Historical			Pro Forma Adjustments			First Advantage Pro Forma
Service revenues	$	100,924,598		$	23,962,262		$	124,886,860		$	30,341,000		$	—		$	155,227,860
Cost of revenues		45,418,967			9,385,128			54,804,095			9,450,000			—			64,254,095

Gross margin		55,505,631			14,577,134			70,082,765			20,891,000			—			90,973,765
Selling, general, and administrative expenses		51,004,721			18,949,453			69,954,174			28,818,000			61,667	(D)		98,833,841

Income (loss) from operations		4,500,910			(4,372,319	)		128,591			(7,927,000	)		(61,667	)		(7,860,076	)

Interest (expense) income:
Interest expense		(228,559	)		(1,069,115	)		(1,297,674	)		(16,212,000	)		226,296	(C)		(17,283,378	)
Interest income		59,102			118,579			177,681			68,000			—			245,681

Total interest expense, net		(169,457	)		(950,536	)		(1,119,993	)		(16,144,000	)		226,296			(17,037,697	)

Income (loss) before provisions for income tax		4,331,453			(5,322,855	)		(991,402	)		(24,071,000	)		164,629			(24,897,773	)
Provision (benefit) for income tax		1,629,142			(2,129,142	)		(500,000	)		5,000			66,757	(G)		(428,243	)

Net income (loss)	$	2,702,311		$	(3,193,713	)	$	(491,402	)	$	(24,076,000	)	$	97,872		$	(24,469,530	)

Per share data:
Basic and diluted (loss) earnings per share											(0.41	)(H)				$	(1.24	)(H)

Basic and diluted weighted average shares outstanding											58,711,000						19,803,743	(I)

See the accompanying notes to the unaudited pro forma combined financial information.

FIRST ADVANTAGE CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

Three Months Ended March 31, 2003

	FAST Division Historical			US SEARCH Historical			Pro Forma Adjustments			First Advantage Pro Forma
Service revenues	$	31,540,656		$	8,079,000		$	—		$	39,619,656
Cost of revenues		13,818,968			2,693,000			—			16,511,968

Gross margin		17,721,688			5,386,000			—			23,107,688
Selling, general, and administrative expenses		17,019,184			6,965,000			4,217	(D)		23,988,401

Income (loss) from operations		702,504			(1,579,000	))		(4,217	)		(880,713	)

Interest (expense) income:
Interest expense		(18,809	))		(230,000	)		18,809	(C)		(230,000	)
Interest income		10,726			—			—			10,726

Total interest expense, net		(8,083	))		(230,000	)		18,809			(219,274	)

Income (loss) before provisions for income tax		694,421	)		(1,809,000	)		14,592			(1,099,987	)
Provision (benefit) for income tax		298,601	)		2,000			5,837	(G)		306,438	)

Net income (loss)	$	395,820	)	$	(1,811,000	)	$	8,755		$	(1,406,425	)

Per share data:
Basic and diluted (loss) earnings per share					(0.02	)(H)				$	(0.07	)(H)

Basic and diluted weighted average shares outstanding					97,021,055						19,805,195	(I)

FIRST ADVANTAGE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

(A)

In accordance with the merger agreement, at the closing date, First Advantage will have additional cash of $15.0 million less merger related costs and fees such as legal, accounting and financial advisor fees, estimated to be approximately $6.6 million, amounts due under a loan made to US SEARCH by First American, and the amount of the FAST division’s current cash balance. This additional cash infusion is to be provided by First American. The net amount of the additional cash infusion is estimated as follows:

Minimum cash per the merger agreement	$	15,000,000
Less: Estimated merger closing costs		(6,650,000	)
Less: Cash loaned to US SEARCH		(1,447,000	)
Less: Cash balance of the FAST division as of March 31, 2003		(6,681,152	)

Estimated cash infusion by First American	$	221,848

(B)

The estimated purchase price of US SEARCH for purposes of preparing these unaudited pro forma financial statements is $60.0 million. This is based upon an estimate of the fair value of the net assets of the FAST division contributed by First American to First Advantage in the mergers and estimated direct costs of the mergers. The allocation of the purchase price is based upon preliminary estimates of the assets and liabilities acquired in accordance with SFAS 141. The acquisition of US SEARCH is based on management’s consideration of US SEARCH’s past and expected future performance as well as the potential strategic fit of US SEARCH with the long-term goals of First Advantage. The expected long-term growth, market position of US SEARCH and expected synergies to be generated by inclusion of US SEARCH are the primary factors which gave rise to an acquisition price which resulted in the recognition of goodwill. A full determination of the purchase price allocation will be made within twelve months of the effective acquisition date upon receipt of a final valuation analysis of tangible and intangible assets. It is anticipated that the final purchase price allocation will not differ materially from the preliminary allocations.

The estimated purchase price was determined as follows:

Fair value of FAST Division net assets	$	173,000,000

Fair value of 20% of the FAST Division net assets contributed	$	34,600,000
Net cash infusion from First American		221,848
Estimated merger related closing costs		6,650,000
Cash loaned to US SEARCH by First American		1,447,000

Total consideration paid by First American for 80% of US SEARCH	$	42,918,848

Value of 100% of US SEARCH	$	53,648,560
Value of vested options and outstanding warrants of US SEARCH		6,364,000	*

Purchase price	$	60,012,560

Due to the fact that there currently is no quoted market price for First Advantage’s Class A common stock, for purposes of this analysis, the fair value of vested options and outstanding warrants is based upon the quoted market price of US SEARCH common stock on December 16, 2002. The final purchase accounting adjustments will be based upon the quoted price of First Advantage Class A common stock.

FIRST ADVANTAGE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION—(Continued)

The allocation of the purchase price is estimated as follows:

Goodwill	$	53,570,712
Net cash infusion from First American		221,848
Identifiable intangibles assets		3,800,000
Reserve for fair value of operating leases		(1,545,000	)
Technology		8,700,000
Net assets acquired		(4,735,000	)

	$	60,012,560

The estimated fair value of the net assets of the FAST division was determined by First American after the date of the merger agreement based on the actual purchase price paid by First American for each of Employee Health Programs, Inc. and SafeRent, Inc. in the fourth quarter of 2002 and a valuation of the remaining FAST division companies undertaken as part of impairment testing required by SFAS 142.

The pro forma adjustment to goodwill and other intangibles is based upon the purchase price allocation, less amounts previously recorded by US SEARCH as follows:

	Goodwill			Other Intangibles			Technology
Purchase price allocation	$	52,570,712		$	3,800,000		$	8,700,000
Less: US SEARCH balances		(13,529,000	)		(2,572,000	)		(6,374,000	)

Pro forma adjustment	$	40,041,712		$	1,228,000		$	2,326,000

Useful lives		—			3 to 10			5

(C)

In accordance with the merger agreement, the FAST division will not have any debt related to acquisitions and intercompany debt, except for intercompany debt for services rendered and employee related costs incurred before closing. Adjustment reflects the effects on the balance sheet and statements of operations relating to the assumption of these debt obligations by First American as if they had occurred as of January 1, 2002.

(D)

Adjustment reflects the effects of the mergers on rent expense and amortization of the pro forma adjustment for other intangible assets and technology assets as described in Note B, which are included in selling, general and administrative expenses in the statements of operations. The adjustment to rent expense reflects the impact of two lease commitments at US SEARCH which are considered to be above current market prices by approximately 50% and 25%, respectively. Approximately $1.5 million has been recorded as additional liabilities in the purchase accounting adjustments in Note B above relating to adverse lease commitments. A summary of the adjustment is as follows:

	Year Ended December 31, 2002			Three Months Ended March 31, 2003
Reduction in rent expense	$	(750,000	)	$	(187,500	)
Amortization of other intangibles		301,667			75,417
Amortization of technology		510,000			116,300

Total	$	61,667		$	4,217

At the close of the mergers, First American and First Advantage will enter into a services agreement pursuant to which First American will provide certain financial, administrative and managerial support services and overhead services to First Advantage. No pro forma adjustment has been made in the

FIRST ADVANTAGE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION—(Continued)

accompanying unaudited pro forma combined financial statements for the services agreement as the historical financial statements of the FAST division includes actual charges from First American for similar services.

(E)

Adjustment reflects the elimination of the stockholders’ equity of US SEARCH and the issuance of shares of First Advantage common stock with a par value of $.001 per share in the mergers. The estimated number of shares issuable in accordance with the merger agreement is as follows:

	Year Ended December 31, 2002	Three Months Ended March 31, 2003S
Shares outstanding of US SEARCH	97,018,716	97,025,978
Exchange ratio per merger agreement	0.04	0.04

Shares of First Advantage Class A common stock issuable to US SEARCH stockholders	3,880,749	3,881,039
Shares of First Advantage Class B common stock issuable to First American
(Four times the number of shares issuable to US SEARCH stockholders plus an assumed 400,000 additional shares)	15,922,994	15,924,156

Total shares of First Advantage common stock issuable in mergers	19,803,743	19,805,195

The estimated number of shares of First Advantage common stock issuable in the mergers does not include options or warrants to purchase shares of First Advantage Class A common stock that will be outstanding immediately following the mergers, including options to purchase Class A common stock to be issued to former executives of the FAST division and First American who will serve as executives of First Advantage. The estimated number of shares of First Advantage common stock issuable in the mergers also does not include any additional shares of First Advantage Class B common stock that would be issuable to First American if US SEARCH indebtedness exceeds $4.4 million at closing, US SEARCH issues new options or warrants to purchase US SEARCH common stock between signing and closing of the merger agreement, or outstanding options or warrants to purchase US SEARCH Common Stock are exercised between signing and closing of the merger agreement.

(F)

Adjustments reflect the pro forma impact of the acquisitions of Employee Health Programs and SafeRent (both acquired in the fourth quarter of 2002) as if they had occurred as of January 1, 2002:

	Employee Health Programs, Inc.			SafeRent, Inc.			Pro forma Adjustment			Total
Service revenues	$	13,082,137		$	10,880,125		$	—		$	23,962,262
Cost of revenues		7,038,585			2,346,543			—			9,385,128

Gross margin		6,043,552			8,533,582			—			14,577,134
Selling, general and administrative expenses		7,337,888			10,798,565			813,000			18,949,453

(Loss) from operations		(1,294,336	)		(2,264,983	)		(813,000	)		(4,372,319	)

Other (expense) income:
Interest expense		(2,747	)		(1,066,368	)		—			(1,069,115	)
Interest income		—			118,579			—			118,579

Total interest expense, net		(2,747	)		(947,789	)		—			(950,536	)
Accretion of mandatory feature of preferred stock		—			(1,290,278	)		1,290,278			—

(Loss) before benefit for income tax		(1,297,083	)		(4,503,050	)		477,278			(5,322,855	)
(Benefit) for income tax		—			—			(2,129,142	)		(2,129,142	)

Net (loss) income	$	(1,297,083	)	$	(4,503,050	)	$	2,606,420		$	(3,193,713	)

FIRST ADVANTAGE CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION—(Continued)

Adjustment to selling, general and administrative expenses reflects the amortization of customer lists, covenants not to compete, and software over their estimated useful lives of 3 to 10 years. Adjustment relating to the benefit for income taxes reflects the impact if taxes were calculated on a separate return basis.

(G)

Adjustment reflects the effect of the merger on the provision for income taxes. The impact is estimated to be a benefit of $66,757 for the year ended December 31, 2002 and $5,837 for the three months ended March 31, 2003.

(H)

Basic and diluted earnings (loss) per share is calculated as net (loss) to common stockholders divided by the weighted average shares outstanding for the period. Weighted average shares outstanding used in the calculation of pro forma loss per share is based upon the estimated shares to be issued in connection with the mergers as discussed in note (E) above. The calculation of basic and diluted loss per share is as follows:

	Year ended December 31, 2002						Three Months ended March 31, 2003
	US SEARCH Historical			First Advantage Pro Forma			US SEARCH Historical			First Advantage Pro Forma
Net (loss) attributable to common stockholders	$	(24,076,000	)	$	(24,469,530	)	$	(1,811,006	)	$	(1,406,425	)
Divided by:
Weighted average shares outstanding		58,711,000			19,803,743			97,021,055			19,805,195

Basic and diluted (loss) earnings per share	$	(.41	)	$	(1.24	)	$	(.02	)	$	(.07	)

(I)

Weighted average shares outstanding used in the calculation of loss per share is based upon the estimated number of shares to be issued in connection with the mergers as discussed in note (E) above.

DESCRIPTION OF FIRST ADVANTAGE CAPITAL STOCK

The following description of the terms of First Advantage’s capital stock does not purport to be complete and is qualified in its entirety by reference to First Advantage’s certificate of incorporation and bylaws, which are included in the Registration Statement of which this prospectus is a part.

General

First Advantage’s authorized capital stock consists of:

•

75,000,000 shares of Class A common stock, par value $0.001 per share;

•

25,000,000 shares of Class B common stock, par value $0.001 per share; and

•

1,000,000 shares of preferred stock, par value $0.001 per share.

Class A Common Stock

Holders of First Advantage Class A common stock are entitled to one vote for each share held of record on all matters submitted to a vote of holders of First Advantage common stock. Subject to preferences that may be applicable to any outstanding preferred stock, holders of First Advantage Class A common stock are entitled to dividends as may be declared from time to time by the First Advantage board of directors out of funds legally available for that purpose. Holders of First Advantage Class A common stock have no preemptive, redemption, conversion or sinking fund rights. Upon a liquidation, dissolution or winding up of the affairs of First Advantage, the holders of First Advantage Class A common stock are entitled to share equally and ratably, together with the holders of First Advantage Class B common stock, in the assets of First Advantage, if any, remaining after the payment of all debts and liabilities of First Advantage and the liquidation preference of any First Advantage preferred stock then outstanding.

Class B Common Stock

Except as otherwise described as follows, the rights, preferences and privileges of the Class B common stock are identical to those of the Class A common stock described above. Holders of First Advantage Class B common stock are entitled to ten votes for each share held of record on all matters submitted to a vote of holders of First Advantage common stock.

The First Advantage Class B common stock is convertible into shares of First Advantage Class A common stock at a one-to-one conversion ratio as follows:

•

the holder of any share of First Advantage Class B common stock may elect at any time, and at such holder’s sole option, to convert such share into one fully paid and nonassessable share of First Advantage Class A common stock;

•

if at any time First American and its affiliates collectively own less than 28% of the total number of issued and outstanding shares of capital stock of First Advantage, each issued and outstanding share of First Advantage Class B common stock will automatically be converted into one share of Class A common stock; or

•

upon the transfer of any share of First Advantage Class B common stock to a person other than First American or an affiliate of First American (excluding certain permitted transfers), such share will automatically be converted into one fully paid and nonassessable share of Class A common stock.

Notwithstanding the foregoing, First American may transfer shares of Class B common stock (without conversion into Class A common stock) if such transfer is effected as part of a distribution by First American of shares of Class B common stock to its shareholders in a tax-free “spinoff” under Section 355(a) of the Internal Revenue Code of 1986, as amended, and any subsequent transfer of such shares will not cause such shares to convert into Class A common stock.

Preferred Stock

First Advantage’s certificate of incorporation allows its board of directors to issue shares of preferred stock in one or more series without stockholder approval. First Advantage’s board of directors will have discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption rights and liquidation preferences of each series of preferred stock.

The purpose of authorizing First Advantage’s board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with stockholder approval of specific issuances. First Advantage has no present plans to issue any of its authorized but unissued shares of preferred stock.

Warrants to Purchase Class A Common Stock

As a part of the recently completed mergers, First Advantage assumed the obligations of US SEARCH contained in all warrants to purchase common stock of US SEARCH outstanding on the closing date of the mergers. Pursuant to the merger agreement and the terms of the warrants, after the closing of the mergers the holders of the warrants were entitled to receive upon exercise thereof 0.04 of a share of First Advantage Class A common stock for each share of US SEARCH common stock such warrant holder would have been entitled to receive pursuant to the warrant prior to the closing of the mergers. As of May 31, 2003, US SEARCH had outstanding warrants to purchase up to 8,657,019 shares of its common stock at a weighted average exercise price of $0.87 per share. Following the mergers, such warrants were converted into warrants to purchase 346,280 shares of First Advantage Class A common stock at a weighted average exercise price of $21.75 per share.

Registration Rights Relating to Class A Common Stock

Holders of certain US SEARCH warrants have the right to cause First Advantage to register the resale of the shares of Class A common stock underlying such warrants. First Advantage may be required to register the resale of up to 346,280 shares of Class A common stock underlying these warrants. Pequot Private Equity Fund II, L.P. also has the right to require First Advantage to register the resale of shares of Class A common stock held by it under circumstances specified in the stockholders agreement entered into in connection with the mergers.

Transfer Agent

The transfer agent and registrar of the First Advantage Class A common stock is Wells Fargo Shareowner Services. First Advantage acts as transfer agent and registrar of the First Advantage Class B common stock.

EXPERTS

The consolidated financial statements of US SEARCH as of March 31, 2003, December 31, 2002 and 2001 and for each of the three years in the period ended December 31, 2002, included in this prospectus, have been included in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

The combined financial statements of the FAST division as of March 31, 2003, December 31, 2002 and 2001 and for each of the three years in the period ended December 31, 2002, the financial statements of Employee Health Programs as of December 31, 2001 and 2000 and for each of the years then ended, the financial statements of Substance Abuse Management as of December 31, 2000 and for the year then ended and the financial statements of American Driving Records as of December 31, 2001 and 2000 and for each of the years then ended included in this prospectus have been so included in reliance upon the reports of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

The balance sheets and related statements of operations, owners’ equity and cash flows of SafeRent, one of the FAST division companies, for the year ended December 31, 2000, have been included in the FAST division financial information and were audited by Arthur Andersen LLP. We have not been able to obtain, after reasonable efforts, the written consent of Andersen to our naming it in this prospectus as having certified the foregoing financial statements for the fiscal year ended December 31, 2000. Accordingly, Andersen will not be liable under Section 11(a) of the Securities Act for any false or misleading statements or omissions with respect to this prospectus, including the financial statements that Andersen has audited.

The balance sheet and the related statements of operations, owners’ equity and cash flows of SafeRent as of December 31, 2001 and for the year then ended were audited by Arthur Andersen LLP. However, such financial statements have subsequently been restated for the classification and accounting for certain mandatorily redeemable preferred stock and, consequently, such financial statements are presented on an unaudited basis. Such restatement resulted in:

•

The following changes to the balance sheet: (a) reclassification of the balance of $17,595,737 out of owners’ equity and into the mezzanine section of the balance sheet and (b) a new subtotal for owners’ (deficit)/equity of ($5,948,545).

•

The following changes to the statements of operations: (a) inclusion of the accretion of $763,995 related to the mandatorily redeemable preferred stock as a component of other income (expense) and (b) revised net loss of ($7,919,500).

•

The following changes to owners’ equity: (a) elimination of the line item reflecting the accretion on the mandatorily redeemable preferred stock and (b) restatement of the net loss for the year ended December 31, 2001 to the amount previously noted.

•

The following changes to the statement of cash flows: (a) restatement of the net loss amount shown for the year ended December 31, 2001 and (b) inclusion of the accretion as a separate component of cash flows from operations.

LEGAL MATTERS

The legality of the First Advantage Class A common stock offered by this prospectus will be passed upon for First Advantage by its counsel, White & Case LLP, Los Angeles, California.

INDEX TO FINANCIAL STATEMENTS

Explanatory Note: The financial statements and notes thereto referenced below reflect time periods prior to the consummation of the mergers through which First Advantage acquired US SEARCH and the companies formerly comprising the FAST division. The mergers were completed on June 5, 2003. US SEARCH and each of the FAST division companies are now wholly-owned subsidiaries of First Advantage, notwithstanding references in the financial statements and notes thereto below that would suggest that the mergers are pending or that US SEARCH and the FAST division companies are not yet owned by First Advantage.


		Page

FIRST ADVANTAGE CORPORATION

Balance Sheets as of March 31, 2003		F-4

Notes to Financial Statements		F-5

CONSOLIDATED FINANCIAL STATEMENTS OF US SEARCH.COM INC.

Report of Independent Accountants		F-6

Consolidated Balance Sheets as of December 31, 2001 and 2002		F-7

Consolidated Statements of Operations for the Years Ended December 31, 2000, 2001 and 2002		F-8

Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2000, 2001 and 2002		F-9

Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 2001 and 2002		F-11

Notes to Financial Statements		F-12

Unaudited Financial Statements for the Three Months Ended March 31, 2003

COMBINED FINANCIAL STATEMENTS OF THE FAST DIVISION

Report of Independent Accountants		F-49

Combined Balance Sheets as of December 31, 2002 and 2001		F-50

Combined Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000		F-51

Combined Statements of Changes in Stockholder’s Equity for the Years Ended December 31, 2002, 2001 and 2000		F-51

Combined Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000		F-53

Notes to Combined Financial Statements		F-55

Unaudited Financial Statements for the Three Months Ended March 31, 2003

FINANCIAL STATEMENTS OF SAFERENT

Balance Sheets for the Nine Months Ended September 30, 2002 (unaudited) and for the Year Ended December 31, 2001 (unaudited)		F-73

Statements of Operations for the Nine Months Ended September 30, 2002 and 2001 (unaudited)		F-75

Statements of Changes in Owners’ Equity for the Nine Months Ended September 30, 2002 (unaudited)		F-76

Statements of Cash Flows for the Nine Months Ended September 30, 2002 and 2001 (unaudited)		F-77

Notes to Financial Statements		F-78

Report of Independent Public Accountants		F-80

Balance Sheets as of December 31, 2001 (unaudited) and 2000		F-81

F-1

		Page

Statements of Operations for the Years Ended December 31, 2001 (unaudited) and 2000		F-83

Statements of Owners’ Equity for the Years Ended December 31, 2001 (unaudited) and 2000		F-84

Statements of Cash Flows for the Years Ended December 31, 2001 (unaudited) and 2000		F-86

Notes to Financial Statements		F-88

FINANCIAL STATEMENTS OF EMPLOYEE HEALTH PROGRAMS

Balance Sheets for the Nine Months Ended September 30, 2002 (unaudited) and for the Year Ended December 31, 2001		F-107

Statements of Income for the Nine Months Ended September 30, 2002 and 2001 (unaudited)		F-108

Statements of Changes in Stockholders’ Equity for the Nine Months Ended September 30, 2002 (unaudited)		F-109

Statements of Cash Flows for the Nine Months Ended September 30, 2002 and 2001 (unaudited)		F-110

Notes to Financial Statements		F-111

Report of Independent Accountants		F-112

Balance Sheets as of December 31, 2001 and 2000		F-113

Statements of Income for the Years Ended December 31, 2001 and 2000		F-114

Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2001 and 2000		F-114

Statements of Cash Flows for the Years Ended December 31, 2001 and 2000		F-116

Notes to Financial Statements		F-117

FINANCIAL STATEMENTS OF SUBSTANCE ABUSE MANAGEMENT

Report of Independent Accountants		F-124

Balance Sheet as of December 31, 2000		F-125

Income Statement for the Year Ended December 31, 2000		F-126

Statement of Changes in Stockholders’ Equity for the Year Ended December 31, 2000		F-127

Statement of Cash Flows for the Year Ended December 31, 2000		F-128

Notes to Financial Statements		F-129

FINANCIAL STATEMENTS OF AMERICAN DRIVING RECORDS

Report of Independent Accountants		F-136

Balance Sheets as of December 31, 2001 and 2000		F-137

F-2

		Page

Income Statements for the Years Ended December 31, 2001 and 2000		F-138

Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2001 and 2000		F-139

Statements of Cash Flows for the Years Ended December 31, 2001 and 2000		F-140

Notes to Financial Statements		F-141

F-3

FIRST ADVANTAGE CORPORATION

BALANCE SHEETS

(unaudited)

	March 31, 2003		December 31, 2002
ASSETS:
Current assets:
Cash and cash equivalents	$	1,000	$	1,000

Total assets	$	1,000	$	1,000

LIABILITIES AND STOCKHOLDER’S EQUITY:
Stockholder’s equity:
Common stock $0.001 par value; 1,000 shares authorized; 1 share issued and outstanding as of March 31, 2003 and December 31, 2002		—		—
Additional paid-in capital		1,000		1,000
Retained Earnings		—		—

Total stockholder’s equity		1,000		1,000

Total liabilities and stockholder’s equity	$	1,000	$	1,000

The accompanying notes are an integral part of these statements.

F-4

FIRST ADVANTAGE CORPORATION

NOTES TO FINANCIAL STATEMENTS

(unaudited)

1. Organization and Business:

FIRST ADVANTAGE CORPORATION (the “Company”) is a new, wholly owned holding company formed by The First American Corporation on December 12, 2002. The Company currently has no operations.

2. Pending Merger

An Agreement and Plan of Merger dated as of December 13, 2002 has been entered into by and among the Company, The First American Corporation, US SEARCH.com, Inc.(US SEARCH), and Stockholm Seven Merger Corp. (the “Merger Agreement”). Pursuant to the Merger Agreement, the Company will acquire US SEARCH and the six subsidiaries of First American that comprise the First American Screening Technologies (FAST) division. In connection with the transactions contemplated by the Merger Agreement, the stockholders of US SEARCH will receive shares of First Advantage Class A common stock representing approximately 20% of the outstanding equity of the Company, and First American will receive shares of First Advantage Class B common stock representing approximately 80% of the outstanding equity of the Company. The Class A common stock will have one vote per share and the Class B common stock will have ten votes per share on matters presented to the Company stockholders for a vote.

F-5

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of US SEARCH.com Inc.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows present fairly, in all material respects, the financial position of US Search.com Inc. and its subsidiary at December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2, the Company has incurred significant operating losses and negative cash flows from operations since inception and has negative working capital at December 31, 2002. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 2. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ PricewaterhouseCoopers LLP

Los Angeles, California

March 24 , 2003 except for the subsequent events in Note 16 as to which the date is April 1, 2003

F-6

US SEARCH.COM INC.

CONSOLIDATED BALANCE SHEETS

	December 31, 2001			December 31, 2002
ASSETS:
Current assets:
Cash and cash equivalents	$	3,148,000		$	2,254,000
Restricted cash		750,000			575,000
Accounts receivable, less allowance for doubtful accounts of $24,000 (2001) and $72,000 (2002)		696,000			1,864,000
Prepaids and other current assets		1,854,000			1,150,000

Total current assets		6,448,000			5,843,000
Property and equipment, net		9,409,000			9,028,000
Goodwill		8,648,000			13,529,000
Intangible assets, net		2,960,000			2,650,000
Other assets		270,000			249,000

Total assets	$	27,735,000		$	31,299,000

LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current Liabilities:
Accounts payable	$	7,182,000		$	5,604,000
Accrued liabilities		1,930,000			2,958,000
PRSI acquisition obligations, current portion		902,000			474,000
Bank debt, current portion		1,375,000			1,142,000
Notes payable, current portion		3,896,000			50,000
Capital lease obligations, current portion		280,000			125,000

Total current liabilities		15,565,000			10,353,000
PRSI acquisition obligations		1,654,000			1,370,000
Bank debt, net of current portion		—			20,000
Capital lease obligation, net of current portion		156,000			27,000
Other non-current liabilities		5,000			5,000

Total liabilities		17,380,000			11,775,000
Commitments and contingencies (Note 12)
Stockholders’ equity:
Preferred stock, $0.001 par value; authorized 1,000,000 shares; 203,113 and 0 issued and outstanding as of December 31, 2001 and 2002, respectively		—			—
Common stock, $0.001 par value; authorized 300,000,000 shares; issued and outstanding 26,183,058 as of December 31, 2001 and 97,018,716 as of December 31, 2002		26,000			97,000
Additional paid-in capital		84,847,000			118,021,000
Accumulated deficit		(74,518,000	)		(98,594,000	)

Total stockholders’ equity		10,355,000			19,524,000

Total liabilities and stockholders’ equity	$	27,735,000		$	31,299,000

The accompanying notes are an integral part of these consolidated financial statements.

F-7

US SEARCH.COM INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For The Years Ended December 31,

	2000			2001			2002
Net revenues	$	22,363,000		$	18,399,000		$	30,341,000
Cost of services		10,392,000			4,494,000			9,450,000

Gross profit		11,971,000			13,905,000			20,891,000
Operating expenses:
Selling and marketing		25,890,000			10,069,000			11,237,000
General and administrative		12,220,000			10,016,000			14,175,000
Information technology		3,777,000			4,397,000			3,296,000

Total operating expenses		41,887,000			24,482,000			28,708,000

Loss from operations		(29,916,000	)		(10,577,000	)		(7,817,000	)
Interest expense (includes non-cash charges relating to warrants, beneficial conversion features, and amortization of debt issuance costs of $1,165,000 in 2001 and $15,966,000 in 2002)		(108,000	)		(1,522,000	)		(16,212,000	)
Interest income		663,000			167,000			68,000
Other expense, net		—			—			(110,000	)

Loss before income taxes		(29,361,000	)		(11,932,000	)		(24,071,000	)
Provision for income taxes		1,000			5,000			5,000

Net loss		(29,362,000	)		(11,937,000	)		(24,076,000	)
Beneficial conversion feature on preferred stock		(1,029,000	)		—			—
Deemed dividend on exchange of preferred stock		—			(12,575,000	)		—
Accretion of discount on preferred stock		(156,000	)		(203,000	)		—
Accrued preferred stock dividends		(142,000	)		(200,000	)		—

Net loss attributable to common stockholders before cumulative effect of accounting change		(30,689,000	)		(24,915,000	)		(24,076,000	)
Cumulative effect of accounting change on beneficial conversion feature on preferred stock		(3,754,000	)		—			—

Net loss attributable to common stockholders	$	(34,443,000	)	$	(24,915,000	)	$	(24,076,000	)

Basic and diluted net loss per share:
Net loss per share attributable to common stockholders before cumulative effect of accounting change	$	(1.72	)	$	(1.38	)	$	(0.41	)
Cumulative effect of accounting change on beneficial conversion feature on preferred stock		(0.21	)		—			—


Net loss per share attributable to common stockholders	$	(1.93	)	$	(1.38	)	$	(0.41	)
Weighted-average shares outstanding used in per share calculation		17,836,000			18,054,000			58,711,000

The accompanying notes are an integral part of these consolidated financial statements.

F-8

US SEARCH.COM INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

	Series A-1 Preferred Stock				Common Stock			Additional Paid-In Capital			Unearned Deferred Compensation			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares		Amount		Shares	Amount		Additional Paid-In Capital			Unearned Deferred Compensation			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balance, December 31, 1999	—		$	—	17,421,644	$	17,000	$	53,790,000		$	(1,099,000	)	$	(33,219,000	)	$	19,489,000
Amortization of unearned compensation	—			—	—		—		—			418,000			—			418,000
Issuance of warrants to third parties	—			—	—		—		2,179,000			—			—			2,179,000
Accretion of discount on preferred stock	—			—	—		—		(156,000	)		—			—			(156,000	)
Accrued preferred dividends	—			—	—		—		(142,000	)		—			—			(142,000	)
Forfeiture of stock options	—			—	—		—		(1,622,000	)		681,000			—			(941,000	)
Amendment of terms of stock options to former employee	—			—	—		—		220,000			—			—			220,000
Allocation of relative fair value to warrants issued with Series A preferred stock	—			—	—		—		3,552,000			—			—			3,552,000
Exercise of stock options	—			—	516,600		1,000		1,601,000			—			—			1,602,000
Net loss	—			—	—		—		—			—			(29,362,000	)		(29,362,000	)

Balance, December 31, 2000	—			—	17,938,244		18,000		59,422,000			—			(62,581,000	)		(3,141,000	)
Modification of employee stock options	—			—	—		—		68,000			—			—			68,000
Issuance of warrants in conjunction with bank financing	—			—	—		—		1,189,000			—			—			1,189,000
Issuance of warrants to vendors	—			—	—		—		216,000			—			—			216,000
Allocation of relative fair value to warrants issued with notes payable	—			—	—		—		250,000			—			—			250,000
Conversion of notes payable and accrued interest to Series A-1 preferred stock	103,113			—	—		—		10,311,000			—			—			10,311,000
Exchange of Series A preferred stock and cancellation of warrant for Series A-1 preferred stock	100,000			—	—		—		18,935,000			—			—			18,935,000
Deemed dividend on exchange of preferred stock	—			—	—		—		(12,575,000	)		—			—			(12,575,000	)
Accretion of preferred dividends and discount to preferred stock	—			—	—		—		(403,000	)		—			—			(403,000	)
Beneficial conversion feature on convertible notes payable	—			—	—		—		445,000			—			—			445,000
Allocation of relative fair value to warrants issued with convertible Series A-1 preferred stock	—			—	—		—		452,000			—			—			452,000
Stock issued in conjunction with acquisition of PRSI	—			—	8,148,148		8,000		6,492,000			—			—			6,500,000
Exercise of stock options	—			—	96,666		—		45,000			—			—			45,000
Net loss	—			—	—		—		—			—			(11,937,000	)		(11,937,000	)

Balance, December 31, 2001	203,113			—	26,183,058		26,000		84,847,000			—			(74,518,000	)		10,355,000
Issuance of warrants in conjunction with Bank financing	—			—	—		—		48,000			—			—			48,000
Issuance of warrants to vendors	—			—	—		—		180,000			—			—			180,000
Allocation of relative fair value to warrants issued with convertible notes payable	—			—	—		—		1,937,000			—			—			1,937,000
Conversion of Series A-1 preferred stock to common stock	(203,113	)		—	42,107,303		42,000		(42,000	)		—			—			—
Conversion of notes payable and accrued interest to common stock	—			—	27,864,051		28,000		14,718,000			—			—			14,746,000
Beneficial conversion feature on convertible notes payable	—			—	—		—		11,749,000			—			—			11,749,000
Adjustment to purchase consideration	—			—	—		—		4,500,000			—			—			4,500,000
Additional stock issued in conjunction with acquisition of PRSI	—			—	651,852		1,000		(1,000	)		—			—			—
Exercise of stock options	—			—	212,452		—		85,000			—			—			85,000

F-9

Net loss	—		—	—		—		—		—		(24,076,000	)		(24,076,000	)

Balance, December 31, 2002	—	$	—	97,018,716	$	97,000	$	118,021,000	$	—	$	(98,594,000	)	$	19,524,000

The accompanying notes are an integral part of these consolidated financial statements.

F-10

US SEARCH.COM INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31,

	2000			2001			2002
Cash flows from operating activities:
Net loss	$	(29,362,000	)	$	(11,937,000	)	$	(24,076,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		903,000			1,468,000			3,039,000
Provision for doubtful accounts		81,000			24,000			48,000
Loss on disposal of property and equipment		149,000			—			—
Compensation charge for modification of options		—			68,000			—
Charge for warrants issued to third parties		2,179,000			12,000			—
Non-cash interest expense and beneficial conversion feature		—			1,165,000			15,966,000
Credit of unearned compensation		(303,000	)		—			—
Related-party charges		—			161,000			—
Change in assets and liabilities:
Accounts receivable		9,000			(86,000	)		(1,216,000	)
Accounts payable and accrued expenses		2,758,000			250,000			(514,000	)
Prepaid and other assets		2,525,000			4,000			104,000

Net cash used in operating activities		(21,061,000	)		(8,871,000	)		(6,649,000	)

Cash flows from investing activities:
Additions to property and equipment		(4,798,000	)		(3,740,000	)		(2,348,000	)
PRSI acquisition costs		—			—			(220,000	)
Cash payments to PRSI		—			(470,000	)		—

Net cash used in investing activities		(4,798,000	)		(4,210,000	)		(2,568,000	)